Addis Ababa, 14 September, 2015(WIC)- The China Development Bank (CDB) is to provide financial support to Chinese firms in Ethiopia that will encourage in steel, cement and shipbuilding investment, Chinese state media has reported.
“The potential of bilateral industrial cooperation is great. Ethiopia is now one of our key partners in Africa,” CDB president, Zheng Zhijie, told the Xinhua News Agency.
According to Xinhua, the two countries signed five cooperation deals relating to technologies, electric power, finance, energy and aviation during a visit by Ethiopia’s Prime Minister Hailemariam Dessalegn to Beijing earlier this month.
“Ethiopia is a priority partner… and China is ready to increase cooperation in several sectors which includes building industrial parks, investment and financing, “ quoted Chinese premier, Li Keqiang.
According to Xinhua, Chinese direct investment in Ethiopia as of the end of 2014 was USD 910 million and foreign trade between the two countries increased by 55% to USD 3.4 billion.
China is already a major infrastructure investment partner in Ethiopia. China has backed a USD 475m metro rail project in Addis Ababa with construction carried out by the China Railway Engineering Corporation and largely financed through a loan from the Export-Import Bank of China.
In January 2014, the Ethiopian Roads Authority awarded contracts for road construction projects worth the equivalent of USD 320m to three Chinese companies.
Last September, the Beijing-based China Communication Construction Company Ltd started work to expand Bole International Airport, on the edge of Addis Ababa. The project, which aims to triple the number of passengers that can be handled at the airport from the current level of around seven million annually, is set for completion in 2018.
According to the American Enterprise Institute’s (AEI) ‘China Global Investment Tracker’, China’s recent currency devaluation makes the yuan “less valuable and investing overseas more attractive”. The AEI said China’s combined investment and construction overseas to date is worth a total of USD 1.1 trillion. Chinese investments and contracts in Ethiopia from between 2013 and 2015 amounted to USD 7.39bn, AEI said.
International Monetary Fund (IMF) managing director Christine Lagarde said last year that the “scaling up” of energy infrastructure investments in Ethiopia and other African nations was critical for growth to be sustained.
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