The China-Africa Development Fund, more commonly known as CAD Fund, is a

Chinese Chinese can refer to: * Something related to China * Chinese people, people of Chinese nationality, citizenship, and/or ethnicity **''Zhonghua minzu'', the supra-ethnic concept of the Chinese nation ** List of ethnic groups in China, people of ...

private equity In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...

fund solely funded by China Development Bank, a Chinese government policy bank. The aim of the fund is to stimulate investment in Africa by Chinese companies in power generation, transportation infrastructure, natural resources, manufacturing, and other sectors.

History

The creation of CAD Fund was announced as one of the "Eight Measures" for

Sino-African relations Sino-African relations or Afro-Chinese relations are the historical, political, economic, military, social, and cultural connection between mainland China and the African continent. Little is known about ancient relations between China and ...

at the Beijing summit of the Forum on China-Africa Cooperation (FOCAC) by President Hu Jintao on November 4, 2006. It was established in June 2007 with

US$ The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...

1 billion of initial funding by the China Development Bank and is envisioned to grow to US$5 billion in the future. The fund entered into its second round of fundraising in May 2010 to raise US$2 billion. In 2015, China announced its plan to expand the CAD fund to $10 billion.

Investments

The fund's primary purpose is foster Sino-African investment through bridging finance, financial advice, Africa specific managerial advice, and identification of potential investment opportunities as well as connecting African projects to Chinese investors. As of 2010 the fund had invested in 30 projects in Africa worth around US$800 million. In 2009 alone, the fund invested US$140 million of China's total US$1.3 billion invested in Africa that year. The fund primarily focused on industrial development. For example, in 2010 it teamed up with several partners by contributing 382.5 million ZAR into a 1.65 billion ZAR investment by Jidong Cement to build a cement plant in

Limpopo Limpopo is the northernmost province of South Africa. It is named after the Limpopo River, which forms the province's western and northern borders. The capital and largest city in the province is Polokwane, while the provincial legislature is ...

South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. It is bounded to the south by of coastline that stretch along the Atlantic Ocean, South Atlantic and Indian Oceans; to the ...

. The fund has also participated in acquiring natural resource assets by forming a joint venture with

China National Nuclear Corporation The China National Nuclear Corporation (CNNC; ) is a state-owned enterprise founded in 1955 in Beijing. CNNC's president and vice-president are appointed by the Premier of the People's Republic of China. CNNC oversees all aspects of China's civ ...

(then China Guangdong Nuclear Power Group) to acquire most of the

Husab Mine The Husab Mine, also known as the Husab Uranium Project, is a uranium mine near the town of Swakopmund in the Erongo region of western-central Namibia. The mine is located approximately from Walvis Bay. The Husab Mine is expected to be the seco ...

for US$996 million in February 2012. The fund made a rare move in media in December 2013 when it was the financial partner in the acquisition of 20% of Independent News and Media SA, a newspaper publishing house in South Africa, for 400 million ZAR.

List of equity investments

* China-Africa Xinyin Investment (35%) *

Huayou Cobalt Huayou Cobalt Co., Ltd was found in 2002,and specializing in research and development, manufacturing business of new energy Li-ion battery materials and new cobalt materials. As a primarily supplier of cobalt, including cobalt tetroxide, cobalt ox ...

(, 7.59%) * Africa World Airlines

Grants and other activities

The China Africa Development Fund provides support in connection with the overseas

special economic zones A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increas ...

that Chinese enterprises have established in Africa. Although the Chinese government generally takes a hands-off approach to the development of these zones, leaving it to Chinese enterprises to work with host countries to establish them, the CAD Fund provides support in the form of grants, loans, and subsidies.

References

External links