New $2 Billion Fund Puts China, African Development Bank in Project Lockstep

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--China is increasing its funding for project developments in Africa. The Chinese government and the African Development Bank (AfDB) have signed a new, $2 billion financing agreement to set up an investment vehicle, the "Africa Growing Together Fund" (AGTF).

The fund is the largest single amount of money that China has signed off to Africa since the beginning of their partnership four decades ago. Resources from the AGTF are to be provided over a 10-year period. They will be used in step with AfDB's resources to finance eligible sovereign and non-sovereign guaranteed development projects in Africa.

AfDB President Donald Kaberuka said that China is a friend of Africa and invested in infrastructure and natural resources, and the new financial cooperation is the first time in Africa that a multi-lateral route has been taken. Kaberuka signed the agreement with the governor of the Bank of China, Zhou Xiaochuan.

"China would like to go farther in partnering to develop Africa's industrialization and infrastructure," said Zhou Xiaochuan. "We are strengthening the financial cooperation, and this new initiative is supplementary to our traditional cooperation with Africa."

The new fund enables an additional $200 million in larger projects throughout Africa on identical terms and conditions applying to loans made by the AfDB to the same projects.

The AGTF is expected to co-finance some projects before the end of 2015.

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