The European Union has set aside more than 150 billion euros ($170 billion) for investments in Africa through a global fund set up to provide an alternative to Chinese money, according to the European Commission.
The investment would account for half of the EU’s $300 billion Global Gateway project, which was unveiled in December with the goal of improving Europe’s supply chains and combating climate change in areas such as health, energy, and transportation.
It comes as many European countries attempt to limit illegal migration from Africa, which is fueled in part by poverty and unemployment, and as African fossil fuel producers protest tough carbon reduction targets established by wealthier nations to combat global warming.
At a press conference in Dakar with Senegalese President Macky Sall, European Commission President Ursula von der Leyen launched the regional plan.
It is unclear how the monies will be distributed or spent.
The EU stated at the fund’s inauguration in December that the money will come from EU institutions, governments, EU financial institutions, and national development banks in the form of grants, loans, or guarantees.
According to an EU source, the 150 billion may be paid out in 20 billion annual instalments, with just 6 billion coming from EU funds and the balance coming from EU states and private investors.
China started the Belt and Road Initiative in 2013 to improve commercial relations with the rest of the globe, and it has since spent extensively on infrastructure development in dozens of nations around the world, including Africa.
According to EU officials, Beijing’s lending terms are frequently unfavourable and opaque, making some poorer nations, particularly in Africa, debt-dependent on China.