Public works, education and transport top list of investments by China’s Exim Bank in Angola

30 August 2010

Luanda, Angola, 30 Aug – Public works, education and transport projects have benefited most from credit concession agreement between the China Export-Import Bank (Eximbank) and Angola, which now total US$4.547 billion.

According to official figures published recently in the Angolan edition of Exame magazine, in a special supplement dedicated to the economic relationship between Angola and China, over US$905.5 million has been channelled to public works projects, or around 20 percent of the total.

For education projects US$642.5 million has been spent or 24.1 percent of the total and the transport sector has received US$572.8 million, or 12.6 percent of the total.

For the latter sector, the priority was to rebuild the truck fleet, the Angolan magazine reported.

“This replacement, as well as improving the response to growing demand for goods transport, making it possible to transport products from large production centres to large consumer areas, has allowed truckers who were deprived of their main means of production their fair recompense and the re-launch of a new business phase,” it said.

Around US$440 million has been spent on acquiring 500 vehicles for collective transport in Luanda, Benguela, Huambo, Uíge and Malange.

The remainder was applied to acquiring rail transport equipment and 1,500 vehicles.

Also on the list of sector that benefited most was agriculture (US$530.6 million), Energy (US$514.1 million), health (US$409.3 million) and telecommunications and television (US$408.2 million).

Over US$270 million was spent on integrated projects, US$252.8 million for water and US$41.1 million for justice.

Cooperation was focused on “recovery of the main roads and bridges, improvement of power supply and water for recovery of productivity of the main urban centres and the living conditions of the population,” said Exame.

“Investment in human capital (education and health) – vital for the nation’s development, agricultural infrastructures to ensure food self-sufficiency in the medium-term and investment in telecommunications completed the investment that absorbed the various financing packages as part of cooperation with China,” it said.

The funding is the result of agreements signed by the Eximbank and the Angolan Finance Ministry, initially in March, 2004, worth US$2 billion.

This credit lien was then extended with US$500 million in July 2007, via a credit line for complementary projects, and a further US$2 billion in September of the same year.

Selection of the projects is the responsibility of the Angolan side, which via ministerial departments identifies and puts forward the proposals for the consideration of China’s Trade Ministry.

The ministry, after approving the proposals, puts forward the name of three companies to capable of carrying out the project.

At a later stage a tender is launched that is limited to these companies, the result of which requires the approval of the Council of Ministers and a visa from the Audit Court, in line with the cooperation framework.

The contract must then be approved by the sector minister and the necessary banking guarantees must be secured.

Finally, the Angolan Finance Ministry and the Eximbank conclude negotiations for signing the individual funding agreement for the commercial contract, which must be accompanied by the respective licenses for import and export of capital. (macauhub)