China Development Bank to raise $2b for business with Africa
The China Development Bank Corporation’s China-Africa Development Fund plans to raise $2 billion by November to promote business alliances between China and Africa. A report carried by the Wall Street Journal quoted the bank’s vice governor as saying.
The fund according to the report will gather money from insurers and other financial institutions.
The Fund’s investments in Africa currently range from $5 million to $25 million, the Fund’s general counsel, Mark Fung was reported to have said in April at the GaimAsia 2009 hedge fund conference in Hong Kong.
The Fund sees its investment in Africa so far as “passive” but with this development, it intends to take a more “active” role in Africa.
Fung had said that “we want to be less passive and more active.”
They are also so-called passive investments because the fund doesn’t have the resources and expertise to more actively take part in the management of the projects it puts money in, he said. The fund usually seeks eight- to 10-year-long investments. It’s prohibited from taking majority stakes, Fung added.
The state-backed fund was set up in June 2007 with an initial $1 billion from China Development Bank Corp. It is expected to grow to $5 billion, according to a statement issued through PR Newswire in March 2009.
The fund has facilitated almost $400 million in Africa, including a cotton planting and processing facility in Malawi, a power station in Ghana, a glass factory in Ethiopia, and trade zones in Egypt and Nigeria.
By Emmanuel K. Dogbevi