Viable projects are focus of funding

Export-Import Bank of China has reaffirmed its commitment to economic development of Liberia

The Export-Import Bank of China, or Exim Bank, has reaffirmed its commitment to the economic development of Liberia, paying "great attention" to projects that are economically viable for the West African nation.

The bank's cooperation with Africa focuses on solving its problems by funding projects that are sustainable for development, Yuan Xingyong, the bank's vice-president, said during a news conference on September 22 in Beijing.

The bank has cooperated with African countries since 1996, lending more than $100 billion for development projects in nations including Ethiopia, Uganda, South Sudan, Kenya, Zambia, Malawi, Morocco and Cameroon.

In Liberia, Exim Bank has loaned $50 million to the government for the modernization of the country's main airport, Roberts International Airport.

"It's an on-course infrastructure project regarded as a symbol of friendship between the People's Republic of China and the Republic of Liberia," Yuan said.

The financing agreement was signed with the Liberian government on October 3 last year, and work began this year.

Zhang Shou, the bank's deputy general manager for concessional loans, said, "We believe that the project will be a new landmark for Liberia and will be the symbol of friendship between China and Liberia."

Liberia is preparing for its first smooth political transition in more than 30 years following the presidential election on Oct 10.

"Exim Bank values its cooperation with Liberia," said Zhang. "We all hope that the presidential election goes smoothly and that the new government will maintain political stability, and maintain the friendly diplomatic relations with China to lay a good foundation for China-Liberia cooperation."

Exim Bank, a major player in the Forum on China-Africa Cooperation, is strengthening China-Africa ties with its focus on 10 major development projects discussed in 2015 at the FOCAC Summit in Johannesburg, South Africa.

It plays a crucial role in promoting steady economic growth and structural adjustment, supporting foreign trade and implementing China's going global strategy.

"The bank is willing, under the framework of FOCAC and the guidance of the Chinese government, to discuss potential cooperation with Liberia while considering the (country's) debt carrying capacity," Zhang said, adding that the first priority is funding projects that are sustainable to ensure repayment.

She said the bank considers Liberia's economic sustainability through viable projects and hopes "the Liberian side will choose projects that are viable" to promote economic and social development in the long term.

The fear of incurring debts that leave behind little sustainable economic benefit for Liberians continues to resonate in the West African country after a waiver of $4.9 billion by the International Monetary Fund and other lenders in 2007.

"We do not want to see that a loan or financial support provided by China becomes a burden for our African friends," Zhang said.

"So we pay great attention to projects that are economically viable and can reap good economic benefits because, on the one hand, the project can bring social and economic benefits to our African friends and, on the other hand, the project can pay back loans from cash generated. Plus, it will not be a burden for the African countries."

Weng Fei, deputy manager for strategy and planning, said the bank is aware of potential risks before conducting business with countries.

He said there are measures to evaluate the political and social condition of a country to forecast risks before lending.

However, the bank insists it is committed to "flexible financing" to ensure projects are adequately executed.

The bank vice-president said Africa's economy and trade are showing improvements because the political environment is "becoming stable and creating better business conditions amid urgent development demands".

Yuan described the continent as a "bright spot for investment," referring to the presence of more than 3,000 Chinese companies.

He said the bank "embraces the principles of transparency while cooperating with African countries" and has signed 10 deals - including railway, airports and road projects - with African countries as part of the Belt and Road Initiative.

The bank has funded another airport project in Zimbabwe that is expected to boost the country's tourism; a hydro power project in Guinea; the Addis Abba-to-Djibouti railway; and a power project in northeast Ethiopia to enhance the exporting of electricity to countries in East Africa.

"We respect efforts by African countries and we maintain fairness in conducting business," Yuan said. "We respect local culture and want to improve development in practical ways."

For China Daily

(China Daily Africa Weekly 09/29/2017 page24)