Chinese-issued rand bonds to bankroll infrastructure
Citing an Industrial and Commercial Bank of China (ICBC) statement, news agency Reuters said bank governor Yi Huiman had signed an agreement on Wednesday to appoint the Standard Bank Group to issue the bonds, at a ceremony attended by Chinese President Xi Jinping and President Jacob Zuma.
The ICBC is China’s biggest lender by assets, and Standard Bank is Africa’s biggest banking group by assets – and is 20% owned by ICBC.
According to the report, funds raised will be used for infrastructure projects in South Africa. The ICBC said that, to date, it had lent nearly $10-billion to more than 40 China-Africa projects spanning 20 countries.
In a statement, the South African government said the agreement will facilitate the raising of rand-denominated funding for the ICBC, which will be made available to strengthen the various sectors of the local economy, with a particular focus on power and infrastructure over the next five years.
The deal with the ICBC is just one of 26 agreements worth R94-billion that were signed on Wednesday at the Union Buildings in Pretoria, during Xi’s state visit.
The agreement comes ahead of this weekend’s summit of the Forum on China-Africa Co-operation to be held in Johannesburg.
As reported by Bloomberg: “The deals include a $2.5-billion credit line provided by the China Export & Credit Insurance Corporation to South African rail and transport operator Transnet for electrical and mechanical equipment, and a $500-million China Development Bank loan-finance accord that will help [Eskom] complete its power plant construction plan.
“One of the agreements is aimed at synchronising discrepancies in trade statistics.”
South Africa and China also agreed to waive visa requirements for diplomatic and government passport holders, Reuters reported. “The two countries also signed a deal to improve co-operation in nuclear power, but gave no details,” the agency said.
Chinese commerce with Africa reached $220-billion last year, making it the continent’s biggest trade partner, Bloomberg reported.
But the Chinese ministry of commerce said last month that the country’s investment in Africa had fallen by more than 40% in the first half of 2015.