A Chinese private equity fund set up a year ago for ventures in Africa plans to spend about $300 million on projects in 2008, its vice-president said on Friday.
The China-Africa Development Fund (CADFund) was launched in June 2007 with an initial $1 billion provided by the China Development Bank and plans to eventually grow to $5 billion, the fund’s vice-president Hu Zhirong said.
It has invested $60 million in the first glass factory in Ethiopia, a power station in Ghana and a chrome plant in Zimbabwe. It is also working with several Chinese firms to form a holding company that will manufacture construction materials in all African countries.
“The fund is very young…in our plan we are willing to invest about $300 million in Africa by the end of this year,” Hu said.
Hu spoke to Reuters on the sidelines of a conference held by the five-nation East African Community.
CADFund’s priorities are in agriculture and manufacturing industries, infrastructure development, natural resources and industrial parks.
The 120 million people trade bloc wants to sell itself as a single investment destination.
These discussions are similar to those the Economic Community of West African States (ECOWAS), a regional group of fifteen countries, has recently had with Chinese delegations, though the larger ECOWAS has been trying to positioning itself for $10 billion in Chinese aid.
The Vice-President of ECOWAS Commission, Mr. Jean de Dieu Somda, has said that the regional body is strategising and working towards attracting a fair share of Chinese aid and investment funds to Africa.
This came amidst fears by some stakeholders over cheap and inferior Chinese products in the Nigerian market. The President of the African Business Roundtable, Alhaji Babamanga Tukur, said he would wish to see Chinese industries transplanted in Africa instead of raw materials being removed from the continent for factories in Asia. Tukur, who doubles as chairman of the NEPAD Business Group, noted also that China does not have a proper trade structure in Africa. He urged the delegation to ensure that the Chinese trade mission which is being planned for Egypt is also cited in West Africa.