Two Chinese financial institutions are gearing up to pump US$850 million of capital into the African Export–Import Bank (Afreximbank) to greatly enhance the bank's support to African businesses seeking to diversify and expand their trade activities.

President and chairman of the board of directors of the African trade finance bank, Benedict Oramah, strongly endorsed the Chinese funding during a statement made in Cairo on 12 September.

Oramah was reporting on the bank's participation in the recently concluded Forum for China-Africa Cooperation (FOCAC), held in Beijing from 3 to 4 September. During negotiations at the event the bank signed agreements for a US$500 million facility with China Development Bank (CDB), and a US$350 million facility with Bank of China.

On 6 September CDB signed an agreement providing a US$500 million facility to the African Export-Import Bank (Afreximbank) to enable the African trade finance bank support trade-enabling infrastructure projects across the continent.

CDB president Zheng Zhijie and Afreximbank president Benedict Oramah signed the facility agreement on behalf of their two institutions during a ceremony held on the sidelines of the "4th Investing in Africa Forum", which took place in Changsha.

The facility will also be used to support Afreximbank's trade finance intermediaries to provide medium to long-term financing for sub-projects in various sectors, including energy, telecommunication, transportation, agriculture, medical sector, industrial park or any related trade finance transactions. The facility carries a 10-year tenor.

"This facility strengthens our capacity to realize our mandate and makes it possible for Afreximbank and CDB to achieve important development outcomes in Africa," says Oramah.

"We are actively seeking to drive Africa's development by working with partners to support employment creation, increased economic activities, and increased tax earnings for governments arising from increased commercial activities resulting in increased earnings and profitability," adds Oramah.

Zheng reveals that since 2006 CDB has provided more than $50 billion for nearly 500 projects in 43 countries. Those funds have been used to support a large number of key projects across many sectors, including in infrastructure, energy and minerals, telecommunications and agriculture.

The Bank of China agreement followed the signing of a memorandum of understanding (MoU) between the Chinese bank and Afreximbank. Under the terms of the MoU, the two institutions committed to collaborating in the identification of co-financing and co-investing opportunities; cooperating in projects and transactions to enhance trade and investment between China and Africa; and supporting projects under the Belt and Road Initiative in order to bring shared development opportunities to China and Africa.

While in Beijing the Afreximbank delegation met with Zhang Qingsong, the new President of China Exim Bank, to discuss areas of collaboration. Meetings were also held with Liqun Jin, chairman and president of the Asian Infrastructure Investment Bank, and Liu Liange, president of Bank of China.

The African Export-Import Bank (Afreximbank) is the foremost pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade. The Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors. Since then it has approved about US$60 billion in credit facilities for African businesses, including about US$8.5 billion in 2017. Afreximbank had total assets of $11.9 billion as at 31 December 2017.