China Pouring Money Into Resource-Rich Africa

China in Africa

DALIAN, China, Sept 11 - Standard Bank (SBKJ.J: Quote), Africa’s top bank by assets, said on Friday it had obtained a $1 billion loan facility from four Chinese banks, drawing on its equity tie-up with China’s biggest bank to push into Asia.

China has been pouring money into resource-rich Africa, welcomed by some, but drawing criticism from Western aid groups, who say the country is turning a blind eye to misrule and corruption.

China argues it is spreading prosperity in the world’s poorest continent where the West has failed.

One of the four Chinese banks behind the facility is Industrial and Commercial Bank of China (ICBC) (1398.HK: Quote) (601398.SS: Quote), which owns 20 percent of Standard Bank and is the world’s biggest bank by market value, Standard Bank said in a statement.

The other three banks are Bank of China (3988.HK: Quote) (601988.SS: Quote) China Development Bank and China CITIC Bank (601998.SS: Quote) (0998.HK: Quote), according to the statement.

“This deal will serve as a platform for future cooperation between Standard Bank and these banks across a range of different banking products and geographies to support Chinese companies going global into emerging markets,” said Standard Bank Chief Executive Jacko Maree in the statement.

CHINA PARTNERS

Standard Bank and ICBC aim to jointly support Chinese companies going out into emerging markets especially into Africa, Maree said.

The facility between Standard Bank and its Chinese partners is a five-year fund-raising deal, repayable in a bullet capital single tranche at maturity, and the facility is a “debut term loan for Standard Bank’s fund raising in the Asian market”, the bank said in the statement.

Standard Bank expects to seal a dozen major lending deals in Africa with its China partner next year, as resource-hungry Chinese firms begin returning to the continent, Reuters reported earlier this week. [ID:nHKG127767]

Standard Bank has said that Chinese companies are looking for opportunities in Africa with focuses on mining, oil and gas and mineral sectors, where the African bank expects to see fast-growing and huge demand for financing in these resources and infrastructure-related sectors. Source: (Reuters)