Special Loan for the Development of African SMEs Funded by China Development Bank

Special Loan for the Development of African SMEs Funded by China Development Bank


CDB Special Loan for the Development of African SMEs

2009117
On November 7, 2009, Premier Wen Jiabao delivered a speech at the 3rd China-Africa Entrepreneur Conference of the Forum on China-Africa Cooperation co-organized by CDB.

At the Fourth Ministerial Conference of Forum on China-Africa Cooperation, H.E. Mr. Wen Jiabao, Premier of the State Council of the Peoples Republic of China, announced Eight New Measures to strengthen China-Africa cooperation, among which the third measure is to help Africa build up nancing capacity, and support Chinese financial institutions in setting up a US$1 billion special loan for small and medium-sized African businesses (hereafter referred to as the Loan).

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China Development Bank


CDB Special Loan for the Development of African SMEs

As the co-chairs of Chinese Follow-up Committee of Forum on China-Africa Cooperation, Ministry of Foreign Affairs and Ministry of Commerce of the Peoples Republic of China have been keeping in contact with their African counterparts and implementing the Eight New Measures (including the Loan) to contribute to African peoples well beings.

20091222
On December 22, 2009, H.E. Mr. Zhai Jun, Vice Minister of Foreign Affairs of the PRC, met with H.E. Mr. Seif Ali Iddi, Vice Minister for Foreign Affairs and International Cooperation in Beijing.

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CDB Special Loan for the Development of African SMEs

2010419
On April 19, 2010, H.E. Mr. Fu Ziying, Vice Minister of Commerce of the PRC, met with H.E. Mr. Sylvain Maliko, Minister of Economy, Planning and International Cooperation of Central African Republic in Bangui.

10 As a member of Chinese Follow-up Committee of Forum on China-Africa Cooperation, CDB actively prepares and sets up the special loan of US$1 billion for the development of African SMEs.

Measures to Support the Development of African Countries Implemented by CDB: 2009 10 Eight New Measures in 2009 Set up the Special Loan for the Development of African SMEs (US$1 billion for Phase I) 2006 Eight Measures in 2006 Establish China-Africa Development Fund Besides, CDB also participated in and subsidized the implementation of the Academic Exchanges Plan in Eight New Measures.

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CDB Special Loan for the Development of African SMEs

Overseas investment is not a zero-sum game; it is important to stick to the principles of mutual benet, win-win results and local development When we make investments in developing countries, it is especially important to bear in mind the development of local infrastructure, peoples livelihood, agriculture, employment, environmental protection, and in particular the capacity building for the host country to achieve an independent and sustainable future. Chen Yuan, Chairman, China Development Bank

200939
On March 9, 2009, H.E. Mr. Chen Yuan, Chairman of CDB, met with H.E. Mr. Jakaya Kikwete, President of Tanzania, and signed the Framework Agreement on Financial Cooperation with H.E. Mr. Benno Ndulu, Governor of the Bank of Tanzania in Dar es Salaam.

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CDB Special Loan for the Development of African SMEs

20109 1MASLOC
In September, 2010, witnessed by President Hu Jintao and John Evans Atta Mills, President of Ghana, CDB and Ghanaian Ministry of Finance signed the Framework Agreement for an Overall Financing Cooperation. Among which, the amount of the Loan is US$100 million, devoting to the Micro-nance and Small Loans Centre (MASLOC) as well as SMEs in the sector of public transport, mechanical processing, etc.

CDB is the worlds largest development nancial institution with total assets more than that of the World Bank, Asian Development Bank, and African Development Bank combined. CDB is dedicated to the national strategies and inclusive nance, building a nancial system equally available to everyone, and promoting the joint development of the nancial sector as well as the whole society. President Hu Jintao praised CDB as Chinas largest outbound investment and nancing bank. The credit ratings of CDB remain the same with the national sovereign ratings.
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CDB Special Loan for the Development of African SMEs

Through the practice of development nancing theory, CDB has actively supported largescale projects in elds of infrastructure, basic and pillar industries (Two Basics and One Pillar), which made a signicant contribution to Chinas rapid economic development. While actively supporting projects of Two Basics and One Pillar, CDB also devoted significant resources to international cooperation and peoples livelihood areas including SMEs in recent years.

201161698 1238100 As of the end of June 2011, CDBs outstanding foreign exchange loans reached US$169.8 billion, among which overseas loans amounted to US$123.8 billion, meeting the funding needs of projects covering nearly 100 countries and regions, the amount of total foreign exchange loans ranks rst among Chinas banks.
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CDB Special Loan for the Development of African SMEs

2010 13.86
In the year of 2010, CDB issued 1.386 billion RMB in loans to support the fruit industry in Xinjiang, improving the living standards and livelihoods of the regions famers.

20084
CDB offered nancing support to a gas-red combined-cycle power plant in Ghana. The project started in April 2008, will significantly improve power supply in Ghana, and effectively promote economic development and residential electricity consumption of the country.

201161102 20 447 As of the end of June 2011, CDB had cumulatively extended loans of 110.2 billion RMB, having financed Chinese SMEs, self-employed people and rural households in more than 20 industries such as agriculture, manufacturing, infrastructure and commercial circulation, and created 4.47 million jobs. While benefiting the general public with inclusive nance, CDB has also accumulated much experience in nancing SMEs, which laid a good foundation for the launching of the Loan.
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China Development Bank


CDB Special Loan for the Development of African SMEs

As the executive platform and organizer of the Loan included in the Eight New Measures, CDB will help African SMEs develop and prosper by following the market rules and drawing upon experience from domestic grassroots nancial services to play an important role in beneting the general public of the African continent, stabilizing African labor market, and developing local market and economy.

20104 1000IDBZ3000
During his visit to Zimbabwe in April of 2010, H.E. Mr. Zheng Zhijie, Executive Vice President of CDB, met with H.E. Mr. Tendai Biti, Zimbabwes Minister of Finance. By now in Zimbabwe, CDB has disbursed US$10 million of the Loan to Zimbabwes Cotton Project, and has committed to the Infrastructure Development Bank of Zimbabwe (IDBZ) US$30 million of the Loan for supporting the development of SMEs in Zimbabwe.

China Development Bank

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CDB Special Loan for the Development of African SMEs

Special Loan for the Development of African SMEs

The Loan is provided by CDB under the framework of the Forum on China-Africa Cooperation with the purpose of broadening the nancing channels of SMEs, vitalizing local economy, creating employment opportunities, enlarging trade volume and increasing peoples living standard. The Loan is available to all qualied African SMEs. It is a symbol of pragmatic China-Africa cooperation and an implementation of Eight New Measures commitment.

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China Development Bank


CDB Special Loan for the Development of African SMEs

Main characteristics
5 Government Background: The Loan is one of the Eight New Measures announced by Chinese government. CDB intends to help African SMEs ease the nancing difculties, and then to deepen the cooperation between China and African countries. Commerciality: The Loan is not governmental aid funds. CDB will follow commercial principles, and set the price according to the importance of the project, the credit rating of the borrower and the result of project risk assessment, etc. Universality: CDB would carry out the Loan according to the realities of each country and complying with the principle of One Country, One Policy, to seek to benet every African country. Flexibility: The Loan aims to meet various nancing needs of SMEs. The loans could be xed assets loans or liquidity loans with tenor of no more than 5 years; currency of the loans can be U.S. dollar, Euro or RMB; floating or fixed interest rate can be adopted; drawdown and repayment schedule could depend on negotiation.

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CDB Special Loan for the Development of African SMEs

Acceptable Standard of African SMEs

The standard of SMEs set by related department of local government The standard of SMEs set by local market Being recognized as local SMEs by related department of local government The standard in countries of similar economic development level in the same region or The standard set by relevant regional nancial institutions

2010513
On May 13, 2010, CDB and Standard Bank of South Africa signed Memorandum of Understanding for the Development of SMEs in South Africa in Johannesburg.

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China Development Bank


CDB Special Loan for the Development of African SMEs

The target sectors the Loan supports

Tertiary Industry /Power / Agricultural Water Conservancy and Irrigation /Transportation /Export-oriented Industries / /Agriculture /Building Materials /Deep Processing /Medicine and Health /Telecommunications Basic Industries Others

/Commercial Circulation /Service Industry

Infrastructure

The Loan
/Energy Conservation and Environmental Protection /Culture and Education

2010324 200
On March 24, 2010, CDB, Cameroon Ministry of Agriculture and Shaanxi State Farms Group Co., LTD signed a tripartite framework agreement for supporting an agricultural investment project in Cameroon under the witness of H.E. Mr. Jia Qinglin, the Chairman of Chinese Peoples Political Consultative Conference, and H.E. Mr. Paul Biya, the President of Cameroon. CDB has committed US$2 million to Shaanxi State Farms Group to support its Exemplary Modern Rice Farm Project in Cameroon.

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CDB Special Loan for the Development of African SMEs

Mode and focus of our work

Organize a professional team for the prioritized project. Project Customer Platform Country Appoint special personnel to develop relationship with key customers. Keep in close contact with qualified platforms to solidify the foundation of business. Choose some prioritized countries with relatively stable economic and political situation to begin with.

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CDB Special Loan for the Development of African SMEs

Business progress of the Loan

20116303611 25226.1714 3.2 5100 21764 34400 By the end of June 30, 2011, CDB had signed special loan contracts of US$320 million, committed US$617 million to various projects. It is also following up projects worth over US$1.1 billion covering over 25 African countries. Among which are: To the northern African countries, CDB had cumulatively committed loans amounting to US$51 million; To the central and western African countries, CDB had cumulatively committed loans amounting to US$217.64 million; To the southern African countries, CDB had cumulatively committed loans amounting to US$344 million.

2009.11
Announcement of the Loan

2010.5
Establishment of mechanisms and division of the Loan in CDB

2011.8 2011.6 2010.12 6000 2010.11 Signing the line Signing the line of credit facility of credit facility
A rst loan disbursement of Direct Lending implemented by Wonder Lighting Egypt Co. Project A rst loan disbursement of Platform-lending implemented by Equity Bank of Kenya agreement with Standard Bank of South Africa agreement of 60 million with West African Development Bank

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CDB Special Loan for the Development of African SMEs

The Two Basic Operational Models of the Loan

Platform-lending
2002 5 Government-approved financial institutions or other eligible institutions of the host country will be chosen as platform-lenders shouldering the responsibility of final repayment. CDB would extend proper credit lines to platform-lender, to whom local SMEs could apply for credit line. Once approved, the application should be reported to CDB by the platform-lender for ratication, after which the loan could be disbursed. Minimum Loan Amount: Each loan amount with any platform-lender should not be less than US$2 million, and the amount of each platform-lending deal with individual SME should not be less than US$20,000. Tenor: Generally no more than 5 years. Credit Structure: The sovereignty guarantee, commercial insurance, guarantees by multilateral nancial institutions, pledge, etc. Requirements for platform-lending institutions: Government-designated platformlending institutions, regional or sub-regional nancial institutions, high-ranking institutions in their countries.

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China Development Bank


CDB Special Loan for the Development of African SMEs

Direct Lending
100 5 The locally incorporated enterprises or their holding entities can be borrowers shouldering the responsibility of nal repayment, to whom CDB directly issues loans. Minimum Loan Amount: A single loan amount shall be no less than US$1 million. Tenor: Generally no more than 5 years. Eligible Projects: The applying project is mature and viable with decent government attention, great market potential, improvement of peoples livelihood and controllable risk. Credit Structure: Guarantee, pledge and collateral, commercial insurance. Eligible Borrowers: The borrowers or their holding entities should be profitable foreign-funded enterprises or joint ventures with a fairly high credit rating. The host country should enjoy a stable economic and political status and outlook.

China Development Bank

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CDB Special Loan for the Development of African SMEs

Case
225 1701150 The Equity Bank of Kenya (EBK) is the leading micro-nance lender of the country and even of the whole Africa. CDB has chosen EBK as platform-lender in Kenya. Tea is Kenyas second largest export product, supporting tea processing industry is signicant to revitalizing local economy, creating jobs and stimulating exportation. By now, CDB has issued US$2.25 million in loans to EBK. The loan supported Mataara Tea Factory Expansion Project and Kapkoros Tea Factory Project, created 170 jobs for local people and stimulated exportation volume of US$11.5 million.

Line of credit facility agreement signing ceremony between CDB and Equity Bank of Kenya

Tea Factory supported by the Loan

Tea Factory supported by the Loan

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CDB Special Loan for the Development of African SMEs

6000 West African Development Bank is UEMOAs sub-regional development nancing institution, covering eight western African countries. CDB provided 60 million of the Loan to support SMEs in the region of UEMOA.

Line of credit facility agreement signing ceremony between CDB and West African Development Bank

Meeting on the Loan cooperation between CDB and West African Development Bank

China Development Bank

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CDB Special Loan for the Development of African SMEs

Agricultural Projects

5
The Cotton Planting and Purchasing Project in Malawi brought benefits to more than 50,000 cotton farming households.

Exemplary Modern Farm Project of Shaanxi State Farms Group in Cameroon

300
Sinotex United Cotton Planting, Purchasing and Processing Project in Zimbabwe directly created more than 300 jobs.

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China Development Bank


CDB Special Loan for the Development of African SMEs

Industrial Processing Projects

150216
Wonder Lighting Egypt Co.s annual production of fluorescent tubes reached 1.5 million, with 216 jobs created.

500 5
Together with investment from ChinaAfrica Development Fund, the Loan supported China-Africa Overseas Leather Products Shave Company Project in Ethiopia, creating 500 jobs, benefiting more than 50,000 farming households.

200
Skyrun International Air-Conditioner Manufacturing Factory in Nigeria is mainly involved in producing, assembling and selling air conditioners, creating 200 jobs for local people.

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CDB Special Loan for the Development of African SMEs

The process of the Loan

CDB

Borrower

Borrower submits application

Local country mission or branch receives the application

Project on reservation

Negotiate with CDB on terms and conditions of the loan

Dene the boundary conditions CDB could accept after assessing

Project ratication

Sign the loan contract

Sign the loan contract after ratication

Draw

Lend the loan according to the drawing need

Repay

CDB

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China Development Bank


CDB Special Loan for the Development of African SMEs

Application materials needed

1. 2. 3. 4. 5. 6. 7. 1. Application 2. Identication of the applicant 3. Financial report of the applicant 4. Project feasibility studies or business plans 5. Important contracts and legal instruments related to the project 6. Relative documents of the credit structure 7. Other documents concerned required by CDB

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CDB Special Loan for the Development of African SMEs

Contact Us
/Official Website of CDB http://www.cdb.com.cn

/Contact: Branches, missions, regional groups of CDB Economic and Commercial Counsellors Office of Chinese Embassies in Africa Division of the Special Loan for the Development of African SMEs of Global Cooperation Department of CDB

/Email: cdbafricasme@cdb.cn

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China Development Bank

29 100037 ADD: 29, FUCHENGMENWAI STREET, XICHENG DISTRICT, BEIJING, P.R.CHINA ZIP CODE: 100037 www.cdb.com.cn