China is lending $300m to Afreximbank
The agreement will facilitate trade finance in Africa.The African Bank Export-Import (Afreximbank) obtained a $300 million (€265 million) loan from the Export-Import Bank of China (China Exim Bank) to facilitate trade financing between Africa and the rest of the world.
The five-year syndicated loan, which was only open to investors based in China or Taiwan, should help Afreximbank achieve its objectives, particularly in terms of reducing the cost of financing.
"This syndicated loan system strengthens Afreximbank's position and its role in the development of trade between Africa and the rest of the world, especially China and the Far East," said Denys Denya, one of the vice-presidents of Afreximbank, quoted by Jeune Afrique.
This funding comes a month after Afreximbank and China Exim Bank signed a cooperation agreement to create a $1 billion programme facilitating the creation of special economic zones on the continent.
In a statement, Afreximbank said the two parties will be working together to provide Africa with capacity for light manufacturing and primary processing of raw materials and commodities.
The cooperation will put an emphasis on improving trade finance flows into Africa through risk participation arrangements and indirect funding of Export-Import Bank of China through Afreximbank.