The country also offered to share advance technology with the continent to help with development of high-speed rail, state news agency Xinhua reported.
Li pledged the additional funding in a speech at the Organisation of African Union headquarters in the Ethiopian capital, Addis Ababa.
China will increase credit lines to Africa by 10 billion dollars and will boost the China-Africa Development Fund by 2 billion dollars, bringing it to a total of 5 billion dollars, Xinhua said. It provided no details of the timeframe.
Li "depicted a dream that all African capitals are connected with high-speed rail, so as to boost pan-African communication and development," the report said. As China has advanced technologies in this area, Li said China was ready to work with Africa "to make this dream come true".
China will also offer 100 million dollars in aid for wildlife protection, Li added.
It is Li's first visit to Africa since he became premier last year, and follows on from a trip to the continent by President Xi Jinping in March 2013, when he renewed an offer of 20 billion dollars in loans to Africa between 2013 and 2015.
Li said that the new 10 billion dollars credit line would be on top of the existing 20 billion dollars already offered, the China News Service reported.
Chinese officials said last week that Li's trip, which also takes in oil-rich Nigeria and Angola, would not simply be for energy deals and Beijing will be seeking to help boost African living standards.
Trips by Chinese leaders to Africa are often marked by big natural resource deals, triggering criticism from some quarters that China is only interested in the continent's mineral and energy wealth.
Africans broadly see China as a healthy counterbalance to Western influence but, as ties mature, there are growing calls from policymakers and economists for more balanced trade relations.