IFC finances China investment in Africa
In April, the International Financial Corporation (IFC), the World Bank’s private sector arm, agreed to finance Chinese investment in a Tanzanian commercial complex in Dar es Salaam. This is the first time the IFC has financed a Chinese project in Africa, and follows repeated Bank claims that stringent social and environmental safeguards prevent the IFC from competing with Chinese state-companies for contracts. Although IFC investment in this project is comparatively small, other deals with Chinese investors are ongoing, and the Bank has signalled that it hopes it is a sign of things to come. “Supporting Chinese enterprises for development and cooperation with Africa is one of IFC’s strategic priorities," said IFC chief executive Lars Thunell in April.
Despite in the past complaining about the constraining effects of performance standards and safeguards it seems that in this case the IFC thinks they will guarantee the increased interest of international investors in Chinese investment in Africa. Thunell said that, “The Chinese worry about their reputation and the fact that there has been a lot of criticism. This gives a stamp of approval which will help them mobilise money from other international financial institutions and commercial banks.” Shi Yuan, Managing Director of CRJE Estate, the company behind the Tanzanian project, said that, “IFC has been tremendously helpful in supporting the environmental, social, health, and safety design of our project.” However, concerns abound over environmental and human rights abuses in IFC-assisted investment projects, and on the effectiveness of Bank performance standards and environmental and social safeguards (see Update 71, 70). The IFC has also been subject to numerous criticisms over its projects in Africa, including the controversial Chad-Cameroon oil pipeline (see Update 53).
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