Johannesburg - The China Overseas Infrastructure Development and Investment Corporation (COIDIC) this week opened its first African headquarters in Joburg, marking an important milestone in China-Africa relations.
COIDIC director Zhou Chao said the corporation recognised the challenges of building infrastructure in Africa.
“We will develop in a very short time and provide mature projects in Africa, thereby attracting more funds to invest in African infrastructure.”
COIDIC, with a $500 million capital base, is the first infrastructure development and investment corporation that focuses on overseas early-stage projects, especially those in Africa.
Zhou said the establishment of COIDIC reflected the China-African Fund (CADFund) and China Development Bank’s fulfilment of the ten major co-operation programmes announced by the Chinese government at the Beijing Summit of the Forum on China-Africa Co-operation.
He said COIDIC would focus on incubation of overseas infrastructure projects in order to implement the Chinese government’s “The Belt and Road” strategy to improve Chinese enterprises’ capacity of infrastructure development in Africa and around the world, and to boost development of the projects.
COIDIC develops projects from concept to bankability, contributing to China’s overseas infrastructure investment from the very beginning.
Environment
He said the headquarters were built in South Africa due to its commercial environment, including project opportunities, travel convenience, supporting services, such as engineering, legal, financing and its economic ties with China.
South Africa provided a good living environment, which would help attract and retain talent and smart people, he said.
Zhou said another reason for choosing South Africa was that the CADFund, which held a majority stake in COIDIC, established a representative office in the country in 2008.
Read also: China, SA both 'deeply rooted in culture'
He said COIDIC aimed to establish public-private partnerships (PPP).
Zhou said the core of the PPP model lay in the establishment of a risk-benefit-sharing mechanism to attract
private investment in large public products and infrastructure facilities that were
traditionally invested in by the government.
“The PPP model has proven to be an efficient way of infrastructure investment and financing globally,” Zhou said.
“With the decline in global commodity prices and the appreciation of the dollar, more and more African countries have constraints on their capacity to borrow to finance infrastructure projects, and many national economies are vulnerable to commodity price fluctuations affecting their capacity to service debt and to maintain good credit ratings, thus the importance of PPP model is also increasingly prominent.”
He said COIDIC would continue to complete the development of infrastructure projects in terms of engineering, legal and financing in accordance with the framework of PPP to achieve the financial clout to attract private capital to participate in the investment.