He said the EIB had so far mainly seen Chinese competition in mining sector projects and that it generally reflected China's strategy towards Africa to gain influence on the resource-rich continent.

China has pledged to double aid and offer five billion dollars (3.8 billion euros) in loans and credits to the continent by 2009.

China and African countries also signed trade deals worth 1.9 billion dollars at a summit in Beijing earlier this month that saw the growing Asian giant deepen economic and political ties with the continent.

However, China has faced accusations that it worsens repression and human rights abuses in Africa through support of countries such as Sudan and Zimbabwe in a cynical drive to increase access to African oil and other resources.

To adapt to competition from Chinese lenders, the EIB and its EU member states needed to review the social, labour and human rights conditions it imposes when it makes development loans in the region, he said.

"We should continue to have conditionality, but we need to think about it," he said without out saying how lending conditions should be reformed.

On the same basis as the World Bank, the EIB borrows on capital markets at favourable rates thanks to its backing from member states and then lends the funds for development projects in and outside the 25-nation bloc according to the objectives and limits set by member states.

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