Washington (AP) The promise of hundreds of millions of dollars for a massive trans-Africa rail project that would transport copper and cobalt from central Africa to the Atlantic port of Lobito was one of the centerpieces of President Joe Biden’s visit to Angola last week.
The U.S. International Development Finance Corporation, which was established in 2019 during the first Trump administration to counter China’s expansion of its global reach through infrastructure projects like the mega-port in Chancay, Peru, which was inaugurated just last month, has committed to a $553 million direct loan, making the project possible.
As it commemorated its fifth anniversary on Monday, the U.S. agency vowed to use initiatives like the one in Angola to further U.S. foreign policy and strategic goals. Additionally, it requests congressional reauthorization and increased capacity to invest in additional nations when a strategic necessity to compete with China arises.
According to Scott Nathan, the development agency’s CEO, who visited Angola with the president last week, “we need to be good partners while offering an alternative based on our values.” To put it simply, we must keep showing up.
Nathan will be leaving the position. Donald Trump, the incoming president, has not yet announced who he will appoint to head the agency.
In its first five years, the agency has built a portfolio worth over $50 billion across 114 countries, including digital infrastructure in South America, a power plant in Sierra Leone, and solar panel manufacturing in India. The agency has partnered with private capital to do this by leveraging government financing. According to Nathan, the government used the approximately $800 million in allocations last year to commit to $12 billion in new deals.
According to Nathan, the agency’s investments are significantly boosting economic growth and furthering American strategic objectives.
For instance, the rail project in Angola would save the time and expense of delivering vital minerals, so securing the supply chain.
According to national security adviser Jake Sullivan, the CIA was established during a new geopolitical epoch in which the United States was losing ground to China. The United States need a vision that reflected the magnitude of the transformative challenges we faced and was in line with the new geopolitical reality.
Beijing started the enormous Belt and Road Initiative in 2013 with the goal of expanding its market reach and global influence by constructing roads, railroads, power plants, transmission lines, and ports, mostly in less developed areas.
According to a recent analysis by the U.S. Government Accountability Office, between 2013 and 2021, China contributed $679 billion for international infrastructure projects, including those in energy and transportation, whereas the United States contributed $76 billion during the same time frame. These Beijing-backed projects have drawn criticism from Western politicians for generating debt traps, but Beijing maintains that they have provided the host nations with real and much-needed economic benefits.
The U.S. Development Agency was established by a bipartisan measure enacted by Congress in 2018 with the goal of attracting private investments to low- and middle-income nations using instruments like political risk insurance, loan guarantees, and equity investment.
Secretary of State Antony Blinken commended the agency on Monday for rethinking how the United States approaches development, saying that through its efforts, the United States has demonstrated to other nations that they do not need to turn to projects that are badly constructed, harm the environment, import or mistreat workers, encourage corruption, or leave them with unmanageable debt.
“We truly are the preferred partner,” Blinken stated.
Blinken stated that the agency must do even more and in more nations than before because of the problems that lay ahead.
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