Brokers on the Ground: Chinese Commercial Creditors’ Entry into Africa Sovereign Development Finance

By Tianyi Wu

The portfolio of financiers participating in China’s overseas development finance is changing. Between 2000 and 2019, development finance institutions (DFIs), primarily the Export-Import Bank of China and the China Development Bank, dominated sovereign lending to Africa, committing over $143 billion across transport, energy and ICT (information and communications technology) sectors. Since 2018, DFI commitments have contracted sharply. Annual disbursements have fallen from a peak of over $28 billion in 2018 to just $2.5 billion by 2023. Observers have interpreted this contraction as evidence of strategic retrenchment, debt-distress management or a purposeful reshuffling toward new instruments and actors.

This interpretation, however, misses a critical dimension. Long before the post-2018 pullback, Chinese commercial creditors, equity investors and bond holders have been part of China’s overseas development financier pool. Understanding this diversification requires looking beyond macro-level policy narratives and examining what happened at the project level.

In a new working paper, I examine one of the earliest episodes of this diversification, focusing on commercial creditors: state-owned commercial banks such as Industrial and Construction Bank of China (ICBC), supplier credit providers and private commercial banks. Between 2000 and 2024, over 30 Chinese commercial creditors committed $29.2 billion in individual loan agreements to African governments, representing 20 percent of total Chinese sovereign lending to the continent.

The Brokers Who Mobilized Finance

To understand what happened behind the scenes, I track 24 commercial loan commitments in Ghana and Zambia and speak with 79 stakeholders in China, Ghana and Zambia between 2023 and 2025.

The first group are Chinese contracting firms. In rural Ghana, Hunan Construction Investment Group and China International Water & Electric Corp supported the drafting of electrification project proposals, prepared paperwork for Chinese lender and Ministry of Commerce and identified ICBC as a willing creditor when DFIs stepped back. Similarly in Zambia, Tebian Electric leveraged its networks to connect Zambia Electricity Supply Co., a Zambian national power utility, with ICBC and made the first sovereign ICBC commitment in the country possible. Sinohydro, in both countries, accepted supplier credit risk on its own balance sheet to secure engineering, procurement and construction (EPC) contracts and then activated commercial creditor networks to refinance. In each case, the contracting firm filled the information gap for the lender––vouching for project viability, navigating approval requirements and providing the local knowledge a creditor entering a new market didn’t have.

The second group are African line ministries. Ghana’s Ministries of Energy and Finance shepherded proposals through domestic clearance hierarchies and inter-ministerial approvals and mobilized senior political endorsement that gave ICBC the confidence to proceed. In Zambia. ZESCO turned this into a formal contractor-facilitated lending model: it delegated loan origination to Chinese contractors while providing the sovereign commitment capacity that any creditor required. In both countries, line ministries constituted sovereign credibility at the project level that creditors couldn’t get from a pre-existing state-to-state relationship.

Neither broker could have resolved both the information deficit and the confidence deficit independently. Their complementary engagement (contracting firms provide project knowledge and ministries supply sovereign credibility) is what made commercial creditor entry possible. This is the mechanism that conventional accounts have missed: China’s changing financing modality is not driven only by macro-level policy shifts, but by brokers on the ground assembling conditions that top-down directives cannot produce.

Policy Implications

For African governments:

The brokerage model can also create governance risks. Given contractors’ commercial interests in deal completion, delegating loan origination to them compresses due diligence timelines and weakens host-government bargaining on loan terms. The speed that made ICBC attractive in Ghana and Zambia reflects the electoral and commercial pressures that systematically disadvantage borrowers in negotiation.

African governments should strengthen the independent appraisal capacity of debt management offices and finance ministries, ensuring that proposal assessments are conducted in parallel with contractor-prepared documentation. Where the contractor-facilitated lending model is institutionalized, as in Zambia, formal guidelines of how ministries engage with contractor financing proposals would help level the playing field.

For international financial institutions:

The Ghana and Zambia evidence suggests that deal-level brokerage by embedded actors performs functions that MDB (multilateral development bank) guarantees, first-loss tranches and cofinancing arrangements do not: specifically, translating project proposals across institutional and bureaucratic boundaries and building sovereign credibility at the project level.

MDBs and development partners seeking to crowd in alternative commercial investors should pay closer attention to the project-level political economy of deal assembly. Technical assistance that strengthens host-country capacity to originate, structure and negotiate financing proposals independently would reduce fiscal risk while preserving access to commercial capital.

For researchers and policymakers tracking China’s financing model:

The relationship between brokerage-facilitated entry and sovereign debt sustainability warrants systematic investigation: the speed and informality that characterize brokered deal assembly may carry distinct fiscal risks relative to the more institutionalized DFI lending practices. Tracking aggregate lending volumes and country-level risk indicators only scratches the surface of China’s evolving overseas financing modality. The rest lies beneath: in the phone calls and handshakes that no database can capture.

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