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AFC and China Africa Development Fund-Platform for Chinese Infrastructure Investments into Africa

The Africa Finance Corporation (AFC) at the recently concluded Forum on China-Africa Coorporation, formalised a strategic collaboration with the China Africa Development Fund (CADFund) by signing a memorandum of Understanding (MoU), to provide a framework for cooperation and collaboration between CADFund and AFC in promoting investment and infrastructure development across Africa.

The MoU was signed within the context of the new China-Africa partnership which emphasizes sustainable investing and development in Africa. The principle objective of the parties, through the MoU, is to proactively invest in early-stage development of selected infrastructure assets in key sectors: Energy - power including generation, transmission and distribution; Oil and Gas mid-stream and downstream infrastructure, pipelines and processing networks, indigenization efforts; Transport - highways, airports and seaports, and Telecommunications, across various African countries.

Established in 2007 to promote Chinese investments into Africa, CADFund, a sovereign wealth fund established by the China Development Bank, (the world’s largest bank with assets of over USD1 trillion), is China’s leading private equity investment fund providing development finance with funds under management of approximately USD50 billion. The CADFund has invested over USD500 million to support projects in Africa, including a 200 megawatt power plant in Tema, Ghana, the Lekki Free Trade Zone, Lagos, Nigerian, the Egypt Free Trade Zone, hotel development in Ethiopia and cotton processing in Malawi. Following from the signing of the Beijing Declaration and Beijing Action Plan (2013-2015), at the recently concluded Forum on China-Africa Coorporation, it is the intent of the Chinese Government to enhance investment and financing to support sustainable development in Africa by providing a USD 20 billion of credit line to African countries for development in infrastructure, agriculture, manufacturing, and small and medium-sized enterprises.
Andrew Alli, President & Chief Executive Officer of the Africa Finance Corporation said "Given the scale of Africa’s infrastructure requirement and investment deficit, together with the opportunities created by the drive to engage the private sector in financing the investment deficit. A long term partnership with CADFund will establish a formidable platform for engagement of Chinese investment into Africa”.
The AFC was established in 2007 with a capital base of USD1.0 billion, to be the catalyst for private sector infrastructure investment across Africa. AFC fills a critical void in providing project structuring expertise and risk capital to address Africa’s infrastructure development needs, and is increasingly being seen as the benchmark institution for private sector investment in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications.

Mr Chi Jianxin Chief Executive Officer of China Africa Development Fund said “ Africa is increasingly attracting attention from global investors. The continents’ economic growth, infrastructure requirement and its vast reserves of resources is paving the way for increased collaboration between Chinese companies and the African continent. Through this partnership, AFC will strengthen its commitment to pioneering infrastructure investment solutions on the continent. Indeed, AFC is already actively collaborating with CADFund on a number of investment initiatives involving African projects and Chinese investors”.
About AFC -
AFC is an African-led international financial institution, established in 2007 whose mission is to improve African economies by proactively developing and financing infrastructure, industrial and financial assets. AFC is involved as an investor, developer and financier of various infrastructure projects, and is gaining recognition as the benchmark institution for financing the development of infrastructure projects in Africa. AFC is the lead investor in the award winning Cabeolica project, a USD90 million, 26MW landmark renewable energy wind power project in Cape Verde. AFC is the Technical Adviser to the Central Bank of Nigeria (CBN) on the CBN’s USD2.0 billion Power and Aviation Intervention Fund (PAIF). AFC is also the lead investor in Cenpower Generation Company Limited (Cenpower), which is implementing the USD450 million Kpone IPP project – a 340 megawatt combined cycle gas turbine power plant in Tema, Ghana. AFC recently provided financing to a leading Independent Power Producer (IPP) in Nigeria. AFC is the lead investor in the Main One fibre optic cable project, enhancing West Africa’s connection to Europe and the rest of the world through faster and more technologically advanced broadband capacity. AFC provided a USD 50 million debt investment in Athi River Mining (Kenya) Limited (ARM), the second largest cement operator in Kenya to support expansion initiatives across Eastern and Southern Africa including; development and construction of a lime plant in Tanzania, a cement plant in South Africa, and, expansion of ARM’s cement capacity in Kenya. The transaction marks AFC’s first bilateral investment in Kenya. AFC also invested in the Bakwena toll road project in South Africa. Underscoring its interest in investing in PPPs/PFIs in its focal sectors across the African continent