China-Africa Fund Gets Forex Capital
(Beijing) –The China-Africa Development Fund has finished its second round of fund-raising, securing a US$ 2 billion loan after two years of work, a source close to the fund says.
The money came from the country's foreign exchange reserves as a loan taken out by China Development Bank. The loan has a repayment period of eight to 10 years term with an interest rate set according to the London Interbank Offered Rate.
"This is also a test of diversifying the investment of China's foreign exchange reserves," the source said.
The CAD Fund was launched by the CDB in 2007 to support Chinese companies investing in Africa. The fund was one of eight measures announced by President Hu Jintao at the Forum on China-Africa Cooperation in 2006.
The first phase of US$ 1 billion fundraising was completed in May 2007. The fund will eventually reach US$ 5 billion.
The fund has mainly invested in Africa's agriculture, manufacturing, infrastructure and resources development sectors. By September 2010, the fund has used up all of its US$ 1 billion capital for investment.
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