China-Africa Development Fund

The China-Africa Development Fund, more commonly known as CAD Fund, is a China Government Guidance Fund solely funded by China Development Bank, a Chinese government policy bank. The aim of the fund is to stimulate investment in Africa by Chinese companies in power generation, transportation infrastructure, natural resources, manufacturing, and other sectors.

History
The creation of CAD Fund was announced as one of the "Eight Measures" for Sino-African relations at the Beijing summit of the Forum on China-Africa Cooperation (FOCAC) by President Hu Jintao on November 4, 2006. It was established in June 2007 with US$1 billion of initial funding by the China Development Bank and is envisioned to grow to US$5 billion in the future. The fund entered into its second round of fundraising in May 2010 to raise US$2 billion. In 2015, China announced its plan to expand the CAD fund to $10 billion.

Investments
The fund's primary purpose is foster Sino-African investment through bridging finance, financial advice, Africa specific managerial advice, and identification of potential investment opportunities as well as connecting African projects to Chinese investors.

As of 2010 the fund had invested in 30 projects in Africa worth around US$800 million. In 2009 alone, the fund invested US$140 million of China's total US$1.3 billion invested in Africa that year. The fund primarily focused on industrial development. For example, in 2010 it teamed up with several partners by contributing 382.5 million ZAR into a 1.65 billion ZAR investment by Jidong Cement to build a cement plant in Limpopo, South Africa.

The fund has also participated in acquiring natural resource assets by forming a joint venture with China National Nuclear Corporation (then China Guangdong Nuclear Power Group) to acquire most of the Husab Mine for US$996 million in February 2012.

The fund made a rare move in media in December 2013 when it was the financial partner in the acquisition of 20% of Independent News and Media SA, a newspaper publishing house in South Africa, for 400 million ZAR.

List of equity investments

 * China-Africa Xinyin Investment (35%)
 * Huayou Cobalt (sse: 603799, 7.59%)
 * Africa World Airlines

Grants and other activities
The China Africa Development Fund provides support in connection with the overseas special economic zones that Chinese enterprises have established in Africa. Although the Chinese government generally takes a hands-off approach to the development of these zones, leaving it to Chinese enterprises to work with host countries to establish them, the CAD Fund provides support in the form of grants, loans, and subsidies.

Specific current involvement
The CAD Fund has completed over 60 projects, but also acts as a resource to organize the independent investments of Chinese firms. Sometimes these projects have very few funds directly from the 10 billion USD allocated for the CAD Fund, but benefit from the CAD Fund's logistical experience and monitoring in order for investments to flow with greater efficiency.

Ethiopia
The CAD Fund in Ethiopia targets agricultural and rural development. In 2009, in a joint venture with the Xinxiang Kuroda Mingliang Leather Co. Ltd, the CAD Fund invested roughly 27 million USD towards a large leather product factory close to Ethiopia’s capital, Addis Ababa. The Fund has also helped establish Ethiopia’s special economic zone in collaboration with Chinese companies called the Ethiopian Eastern Industrial Zone (EEIZ). Wherein several independent investment projects are undergoing with potential for large job creation for the local population.

Ghana
The Cad Fund's main investment in Ghana are power plant construction and developments. Most notable is the Asogli power plant in Tema. This plant is the first private owned electricity producing plant in Ghana, using natural gas.

Kenya
The CAD Fund helped organize over 16 million USD in investments towards hydro-power plants as well as several infrastructure improvements. The fund will also support the organization of several Chinese firms with the construction of a large port in Lamu as a part of the Lamu Port Southern Sudan-Ethiopia Transport Corridor project (LAPSSET).

South Africa
The CAD Fund opened an office in Johannesburg which brought investments in the mining sector by Chinese companies as well as venture projects with South African companies. The largest single investment by the CAD Fund in South Africa occurred in 2010 through their support of the Jidong Development Group which invested roughly 52 million USD towards the creation of a cement plant. The CAD fund also directly invested several million USD towards several renewable energy projects. The Fund has also worked to establish and promote the Coega Industrial Development Zone in Port Elizabeth to stimulate further independent investments and job creation.

Zambia
The bulk of the CAD Fund's investments in Zambia are centered around cotton cultivation projects as well as copper mining projects.