May 25, 2014 (KIGALI) - The African Development Bank (AfDB) and China have sealed a $2 billion co-financing fund, which seeks to mobilise resources to enhance development within Africa.
Zhou Xiaochuan, Governor of the People's Bank of China (L) and African Development Bank Group's president Donald Kaberuka after the signing of the fund in Kigali, Rwanda, May 22, 2014 (AfDB photo)
Under the 10-year Africa Growing Together Fund (AGTF) project, resource will reportedly be provided and used alongside the AfDB's own reserves to finance eligible sovereign and non-sovereign guaranteed development projects. "The AGTF marks an important milestone in the long-standing relationship between China and the African Development Bank Group in particular and Africa in general", said Donald Kaberuka, the president of AfDB Group in the Rwandan capital, Kigali. He added, "The AGTF will operate within the strategic framework, policies and procedures of the AfDB, including its integrated safeguards, thereby leveraging on the AfDB's strengths". The AGTF will be immediately established, and is expected to be used to co-finance some projects before the end of this year. Zhou Xiaochuan, Governor of the People's Bank of China, acknowledged the AfDB's work over the last 50 years, and the great strides it has made in promoting growth and alleviating poverty. "The AfDB's rich experience, convening power and strong results-oriented culture made the Bank China's ideal partner for channeling resources in support of long-term growth and development on the continent", Xiaochuan remarked. Meanwhile, the AfDB's chief finance officer said the AGTF will enable an additional $200 million in more or larger-sized projects annually throughout Africa, on identical terms and conditions as for loans made by the AfDB itself to the same projects. "This builds on the success of similar instruments such as the Nigeria Trust Fund, which has been in operation for close to 40 years", remarked Charles Boamah. "We hope that this model will be replicated with many more regional as well as non-regional member countries of the AfDB", added Boamah. (ST).