The IFC has signed its first direct investment with a Chinese company operating in sub-Saharan Africa in an effort to drive the continent’s sustainable development. The organization will help finance a 20-story office and retail building complex in the central business district of Dar es Salaam, Tanzania.
The $10 million loan will go toward a partnership between Mwalimu Nyerere Foundation and China’s CRJE Estate Ltd., a fully owned subsidiary of China Railway Jianchang Engineering Company Ltd. The project will help address the short supply of quality commercial property in the capital and provide increased access to high quality business infrastructure critical for economic growth. IFC is working to mobilize additional financing from East African development financial institutions for the project.
"Supporting Chinese enterprises for development and cooperation with Africa is one of IFC’s strategic priorities," said Lars Thunell, IFC Executive Vice President and CEO. "This investment will contribute to Tanzania’s competitiveness as a regional center, and we believe it will be the first of many transactions bringing sustainable Chinese investment to Africa."
The problem with any World Bank loan is the amount of time that it takes to receive the funds. In addition, China set up the Chinese African Development Fund (CADFund) to further cooperation between Chinese companies and African ventures. It will be interesting to see if more Chinese companies will opt to defer to the IFC for loans to venture into Africa as opposed to the CADFund. However, this could be an indicator that Chinese companies will begin using both monetary systems to develop larger projects in Africa.
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