President Joe Biden recently announced a significant pledge of hundreds of millions of dollars towards an ambitious trans-Africa rail project during his visit to Angola. This project aims to transport copper and cobalt from central Africa to the Atlantic port of Lobito. The funding for this project comes from a $553 million direct loan provided by the U.S. International Development Finance Corporation, established in 2019 to counter China's global infrastructure initiatives.
The U.S. agency marked its five-year milestone by emphasizing its commitment to advancing U.S. foreign policy and strategic interests worldwide. The agency's efforts include projects like the rail project in Angola and seek re-authorization from Congress to expand its investments in countries where there is a strategic need to compete with China.
Over the past five years, the agency has built a portfolio exceeding $50 billion in 114 countries, supporting various projects such as solar panel manufacturing in India, a power plant in Sierra Leone, and digital infrastructure in South America. By leveraging government funding with private investments, the agency has made a significant impact on economic development while advancing U.S. strategic interests.
The rail project in Angola, for instance, is expected to enhance the supply chain by reducing transportation time and costs for critical minerals. National security advisers highlighted the importance of the agency's creation in response to China's Belt and Road Initiative, which aimed to expand its global influence through infrastructure projects.
While China has invested significantly more in international infrastructure projects compared to the U.S., the U.S. development agency focuses on bringing private investments into low- and middle-income countries through various financial tools. Secretary of State Antony Blinken commended the agency for reimagining U.S. development efforts and emphasized the importance of providing alternatives to poorly executed projects that burden countries with unsustainable debt.
Looking ahead, Blinken stressed the need for the agency to expand its reach and impact in more countries to continue being the preferred partner for development initiatives.
