China Development Bank (CDB), one of the country's three policy banks, plans to boost a special lending fund by 1 billion U.S. dollars in 2012 to provide loans for small and medium-sized enterprises (SMEs) in Africa, senior bank officials said Thursday.
The additional funding will increase the Special Loan for the Development of African SMEs to 2 billion U.S. dollars, Liu Hao, deputy head of the international department of CDB, told Xinhua exclusively on the sidelines of the first meeting of the China-Africa Think Tanks Forum in the eastern Chinese city of Hangzhou.
The fund was set up in 2009 after Premier Wen Jiabao announced the financing plan during the ministerial meeting of the Forum on China-African Cooperation (FOCAC) held in Egypt in 2009.
Since then, CDB has committed to financing 24 projects in 25 African countries with loans amounting to 632 million U.S. dollars, Liu said. The projects covered a wide range of sectors, from agriculture to the light industry, and created at least 6,000 local jobs, he added.
The official said projects funded by CDB have helped generate trade amounting to 288 million U.S. dollars.
"The boost in funding is aimed at improving the structure of African SMEs, strengthening their money-making capacities, and creating local jobs while lifting the living standards there," Liu said.
CDB officials said the fund-raising is likely to be formally announced during the next ministerial meeting of the FOCAC, which is set to be held in China next year.
The fund aims to meet various financing needs of SMEs. The loans could be fixed asset loans or liquidity loans with tenor of no more than five years. Floating or fixed interest rates could be adopted. The drawndown and repayment schedule could depend on negotiation, bank officials said.
CDB is considered China's largest outbound investment and financing bank, with assets valued at 900 billion U.S. dollars and outstanding foreign exchange loans amounting to 190 billion U.S. dollars. The bank's credit rating is the same as China's sovereign rating.
Li Jiping, vice president of the bank, said CDB's outstanding loans to Africa had reached 7 billion U.S. dollars by the end of September.
"The importance of Sino-African cooperation has been significantly boosted. The two sides increasingly have more shared interests. The prospect of cooperation is bright as CDB is committed to contributing to the development of Sino-African ties," Li said.
Since the FOCAC was launched in 2000, China and Africa have cemented solid political and diplomatic ties and significantly boosted economic cooperation, said Liu Hongwu, general director of the Institute of African Studies at Zhejiang Normal University.
China is now Africa's largest trading partner. By the end of 2010, China had invested around 40 billion U.S. dollars in over 2,000 enterprises from 50 African countries and regions. These companies cover a variety of sectors, including agriculture, mining, manufacturing and finance.
Direct investment by Chinese enterprises in Africa amounted to 2.1 billion U.S. dollars in 2010, an increase of 46.8 percent over the previous year, according to statistics from the Ministry of Commerce.
However, Liu, the CDB official, said there are stubborn difficulties that need to be solved before advancing Africa's development, citing language barriers, a lack of efficient working teams, and poor infrastructure as three major issues.
Source:xinhuanet