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African Eximbank to extend loans for telecom from ZTE

By Wang Bo (China Daily)
Updated: 2010-09-30 09:41

BEIJING - African Export-Import Bank, a policy lender of trade finance, will provide $56.4 million in loans to help Africa import telecom equipment from ZTE Corp, its president Jean-Louis Ekra said.

The loan is part of the $100 million credit line that China Export-Import Bank (China Eximbank) granted to the Cairo-based lender to fund African imports of capital equipment for projects in the area of telecommunications, mining and power, China Eximbank said on Sept 27.

"The loan will be used to fund the bank's clients in Mauritius for telecom projects in Zimbabwe and Burundi," Ekra said on the sidelines of the African policy lender's 85th board meeting in Beijing, the first time it has been held outside Africa.

The $100 million line of credit agreement between China Eximbank and African Eximbank was signed in 2009 to arrest possible declines in the rapidly expanding trade between China and Africa when the global financial crisis was on in full swing.

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Under the agreement, $20 million will be used to fund short-term trade finance activities with a tenor of up to one year, and $80 million will be channeled to support the import of capital goods and services from China with a tenor of up to seven years.

China-Africa trade grew by an annual average rate of about 40 percent between 2000 and 2008, but that growth rate is being threatened by global economic recession in 2009. The total value of trade between China and Africa was $91.01 billion in 2009, down some 15 percent from a year earlier.

"China has contributed significantly to Africa's economic progress through ameliorating inflation and promoting technology transfer," Ekra said.

"It is the recognition of this role that multilateral financial institutions and some Western African countries show interest and attention to Sino-African cooperation," he said.