The Addis Ababa-Djibouti freight railway, a much-touted component of the Belt Road Initiative in Africa, came under unusual criticism from a senior Chinese financial official. An official of the China Export and Credit Insurance Corporation, known as Sinosure, complained his agency had incurred $ 1 billion in losses because of the project’s poor planning.
The $ 4 billion railway is the economic backbone of a Chinese push for influence in the Horn of Africa. Though completed last year, constant power outages have meant it has carried far fewer trains than expected. The railway’s debt has already had to be restructured. Sinosure, which extends insurance to overseas Chinese projects, took a heavy loss as a consequence.
Wang Wen, chief economist of Sinosure, cited the railway project’s problems when complaining that the financial planning of many of these BRI projects was “inadequate.” He said, “Ethiopia’s planning capabilities are lacking, but even with the help of Sinosure and the landing Chinese bank, it was still insufficient.” Wang cited other Chinese investments like railways in Latin America and sugar refineries that had run into similar problems because of poor planning.
He was speaking in Hong Kong at a conference designed to attract commercial capital for BRI projects.
October 30, 2018