Cairo, 28 Aug. 2023: – The China Development Bank (CDB) today in Cairo signed a development-focused agreement to provide the African Export-Import Bank (Afreximbank) with a US$400-million term loan facility to support the financing of small and medium-sized enterprises (SMEs) across Africa.
The agreement, signed by Mr. Tan Jiong, President of CDB, and Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, at the Afreximbank Headquarters in Cairo, provides for Afreximbank to deploy the facility to support African SMEs involved in extra- and intra-African trade and those engaged in the productive sectors in Afreximbank Member States. According to the agreement, the facility, which has a seven-year tenor, will be deployed either directly to eligible African SMEs that meet Afreximbank’s requirements or indirectly through local financial intermediaries.
Speaking after the signing, Prof. Oramah pointed out that African SMEs continue to struggle to access adequate and affordable financing for growing their businesses and said that the CDB facility would help increase the level of financing available to them.
He added that since Afreximbank was receiving the facility as medium to long-term funding at relatively affordable pricing, the Bank would transfer the financial advantage in pricing and tenor to the end beneficiaries.
“This facility further strengthens the strategic partnership we have developed with the China Development Bank over the last six years, which has seen CDB make three previous interventions in support of our work at Afreximbank,” continued President Oramah. “It will also enable our two institutions achieve our respective mandates and developmental outcomes, which include job creation, increased economic activity and increased extra-African trade with China.”
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About CDB:
Established in 1994, the China Development Bank is a state-funded and state-owned development finance institution. As an independent legal entity directly overseen by the State Council, it is dedicated to supporting China’s economic development in key industries and under-developed sectors.
With a mission to support national development and deliver a better life for the people, CDB aligns its business focus with China’s major medium- and long-term economic development strategies. Leveraging its strength as a leading bank for medium- and long-term financing and comprehensive financial services, it mobilizes economic resources and channels them towards eight key areas: ( 1 ) Socioeconomic development, such as infrastructure, basic industries, pillar industries, public services and management; ( 2 ) Urbanization, urban-rural integration and balanced regional development; ( 3 ) Programs essential for national competitiveness, including the transformation, upgrading, and restructuring of traditional industries, energy conservation, environmental protection, and advanced equipment manufacturing; ( 4 ) Public welfare, including affordable housing, poverty alleviation, student loans, and inclusive finance; ( 5 ) Areas of strategic importance, including science and technology, and people-to-people exchange; ( 6 ) The Belt and Road Initiative ( BRI ), international cooperation in industrial capacity, equipment manufacturing, infrastructure connectivity, energy and resources, and Chinese enterprises “going global”; ( 7 ) Initiatives in support of development and economic and financial reforms; ( 8 ) Other areas encouraged by national development strategies and policies.
Placing a strong premium on pioneering and innovation and tapping into its strengths as a development finance institution, CDB keeps closely to national development strategies, operates on market principles with the backing of sovereign credit, and ensures principal safety and modest profit. Its vigor, influence and risk resilience has been growing continuously, putting it on track to be a world-class, modern development finance institution and a steady force of support for China’s economic and social development. At the end of 2022, CDB had the total assets of RMB 18.2 trillion.
About Afreximbank:
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. For 30 years, the Bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank is setting up a US$10 billion Adjustment Fund to support countries to effectively participate in the AfCFTA. At the end of 2022, Afreximbank’s total assets and guarantees stood at over US$31 billion, and its shareholder funds amounted to US$5.2 billion. The Bank disbursed more than US$86 billion between 2016 and 2022. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). Afreximbank has evolved into a group entity comprising the Bank, its impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure, (together, “the Group”).
For more information, visit: www.afreximbank.com