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China-Africa Development Fund

Country: China

Established: 2007

US$ Billion: 5

Origin: Non-commodity

Entity Structure: Fund

Transparency Rating: 4

Summary:
The China-Africa Development (CAD) Fund was established by the China Development Bank as an investment vehicle in Africa.

Background:
Founded in March 1994, the China Development Bank is under the direct jurisdiction of the State Council.

Debts issued by the China Development Bank are fully guaranteed by the central government of the People's Republic of China. It is one of the largest issuers of bonds in the People's Republic of China.

In March 2007, the Chinese government officially established the China-Africa Development Fund. The funding will be broken out in 3 stages, totaling US$ 5 billion with the first phase being funded by the China Development Bank.

Strategy & Objectives:
The fund will be able to invest in stocks, convertible bonds, and other quasi-equity type of investments. It may also invest in a "fund of funds" type of investment.

News and Updates

1/20/2010
China-Africa Development Fund Invested Nearly $540 Million So Far
Nasdaq reports that, "The China-Africa Development Fund has invested nearly US$540 million to support 27 projects in Africa, which will likely lead to investment of about US$3.6 billion in the continent by Chinese companies, China's Ministry of Commerce said Tuesday. The fund, which was created by the Chinese government in 2007 and seeded with US$1 billion from China Development Bank Corp., makes equity investments that support Chinese investments in Africa. The Ministry of Commerce reiterated in a statement on its Web site the fund's size will increase to US$3 billion, but it didn't give a time frame. The government's ultimate aim is to increase the size of the fund to US$5 billion.

Last year, China-Africa trade fell 15.1% to US$91.07 billion, the ministry said. China's trade with Africa and investment in the continent has been growing sharply in recent years, albeit from a low base, as it looks to secure resources from the continent and find new markets for Chinese goods. "
read more: Nasdaq

4/22/2009
China Seeks Larger Africa Investments, China-Africa’s Fung Says
Bloomberg reports that, " China-Africa Development Fund will seek larger investments on the continent as it becomes more comfortable with the local environment, said Mark Fung, general counsel of the state-backed company. The fund’s investments currently range from $5 million to $25 million, Fung said at the GaimAsia 2009 hedge fund conference in Hong Kong today. They are also so-called passive investments because the fund doesn’t have the resources and expertise to more actively take part in the management of the projects it puts money in, he said. The fund usually seeks eight- to 10-year-long investments. It’s prohibited from taking majority stakes, Fung added.

'We want to be less passive and more active,' he added.

The state-backed fund was set up in June 2007 with an initial $1 billion from China Development Bank Corp. It is expected to grow to $5 billion, according to a statement issued through PR Newswire last month. The fund has facilitated almost $400 million in Africa, including a cotton planting and processing facility in Malawi, a power station in Ghana, a glass factory in Ethiopia, and trade zones in Egypt and Nigeria."
read more: Bloomberg

Websites

CDB Site on CAD Fund

Major Direct Foreign Investments (Public)

Company Country Industry % Ownership Comments


1. All figures quoted are from official sources, or, where the institutions concerned do not issue statistics of their holdings, from other publicly available sources.


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