China injects $2 bn into new Africa fund

The People's Bank of China and the African Development Bank (AfDB) have signed a new financing agreement worth $2 billion, setting up an Africa-wide investment vehicle dubbed "Africa Growing Together Fund" (AGTF).

The resources from the AGTF are expected to be provided over a 10-year period and will be used alongside the AfDB's own resources to finance eligible sovereign and non-sovereign guaranteed development projects in Africa, Xinhua reported.

The financing deal was signed Thursday by AfDB president Dr Donald Kaberuka and the Governor of the People's Bank of China, Zhou Xiaochuan, on the sidelines of the AfDB annual meetings currently underway in Kigali.

The importance of this signature says a lot about the relationship of China and AfDB, Kaberuka said, noting that China is a friend of Africa that has invested in infrastructure and natural resources.

"But now this is the first time in Africa, we are taking a multilateral route," Kaberuka noted.

China, he added, did not have to do this but they have done so because they want to assist in the development of Africa.

Kaberuka said China was inspired by the bank's strong record, adding "we look after our shareholders money, we invest well, and we have robust financial systems."