Billion dollar development deal with AfDB

The African Development Bank (AfDB) and People’s Bank of China (PBOC) last month entered into a $2 billion (R21 billion) co-financing fund agreement, which is to be known as the African Growing Together Fund (AGTF).The AGTF resources are expected to be provided over a 10-year period. It will be used alongside the AfDB’s own resources to finance eligible sovereign and non-sovereign guaranteed development projects in Africa.
President of the African Development Bank Group, Donald Kaberuka said the AGTF marks an important milestone in the long-standing relationship between China and AfDB in particular and Africa in general.
He added that AGTF would operate within the strategic framework, policies and procedures of the AfdB.
Governor of the People’s Bank of China, Zhou Xiaochuan acknowledged the AfDB’s work over the past 50 years and commented on the great strides made by the AfDB in promoting growth and alleviating poverty.
This month, the AfDB Group said it would endorse Africa50 Fund, a concept that was adopted after 12 months of preparation. The fund is based on the mobilisation of African savings to finance African infrastructure.
The head of government and infrastructure at Ernst & Young (Johannesburg), Joe Cosma said, “The AfDB is investing significantly into African infrastructure. They are investing a lot of time in working out how they can work with African governments to define infrastructure requirements and investment options. In a sense, they are competing with the Chinese.”
According to the AfDB, it had approved funding of US$9bn (R94 bn) in 2011, with infrastructure projects accounting for more than $3bn (R31 bn).
Chinese Premier Li Keqiang said the government would boost its line of credit to African nations from US$10bn (R 10.4 bn) to $30bn (R 313 bn).
He also pledged to almost double capital in the China-Africa Development Fund – financial contributor to Chinese companies for private equity deals up to $5bn (R 52bn).
The World Bank statistics states that the sub-Saharan population spread across 48 countries, exceeds 800mn, and generates the same amount of electricity as Spain – with its 45mn population.
”Chinese investors provide both funding and technical expertise, a full implementation package, which African governments find attractive,” Cosma said.
The AGTF will immediately be established and is expected to be used to co-finance some projects before the end of this year. –