The China-Africa Development Fund (CADFund), which has traditionally kept a low profile, has often been seen in the public spotlight over the past year.
The fund and cement producer, Jidong Development Group, decided to invest approximately $220 million to set up a cement plant in South Africa in May 2010. In Ethiopia, a modern leather-processing factory, which was built at a cost of about $26 million and invested by the CADFund and a Chinese leather company, was inaugurated last November. Lower Kafue Gorge Hydropower Station in Zambia, being invested by Sinohydro and Zambia's national electricity company, began construction in July this year and the CADFund has been following up this project.
The bulk of investment into Africa has drawn growing attention, but for Chi Jianxin, they are only among the many projects that the CADFund has in the pipeline.
From vision to action
Chi, CEO of CADFund, is arguably among the busiest mediators engaged in China-Africa investment. But his mannerisms resemble that of a scholar than that of an archetypal banker.
"It [CADFund] is expecting to expand to $5 billion in the coming five years," said the scholarly banker. "We expect to finish the second phase of fund raising, $2 billion, as soon as possible and will kick off the third phase afterward."
Chi said that the China Development Bank (CDB) provided the initial $1 billion, after Chinese President Hu Jintao pledged to establish the CADFund at the Beijing Summit of the Forum on China-Africa Cooperation in 2006.
Since it was founded in 2007, CADFund has decided to invest in more than 40 projects in more than 20 African countries. This would facilitate over $5 billion of further investments from Chinese companies.
"CADFund is truly a necessary institution to encourage increasing number of Chinese enterprises to invest in Africa," Chi told ChinAfrica.
The fund says that its investment focuses mainly on the processing industry in terms of the number of projects, including construction materials, automobiles, and household electrical appliances. This is in addition to agriculture and infrastructure areas. The fund has also invested in natural resources exploration projects in order to enhance locally sustained development.
For instance, a glass plant in Ethiopia, where the CADFund initially holds shares of 40 percent, ended Ethiopia's history of incapability for producing glass.
The fund covers a wide range of areas, a Chinese entrepreneur based in South Africa, who prefers to be anonymous, told ChinAfrica. "[Through the cooperation with the fund,] we are able to obtain capital from the fund, and apply for business loans from its parent, China Development Bank," he said.
So far, the fund has set up offices in South Africa, the continent's biggest economy, Ethiopia and Zambia. The fund is also planning to set up additional offices in countries in western and northern Africa. The entrepreneur added that the business network across the African continent and good cooperation with local governments and organizations have also helped CADFund bring in a large number of projects.
CADFund has teamed up with Chinese companies for investments in Africa and is largely a financial investor. The fund does not hold controlling stakes in any project.