The African Development Bank (AfDB) and the People’s Bank of China (PBOC) have entered into a US $2 billion co-financing fund to finance eligible sovereign and non-sovereign guaranteed development projects in Africa.

The fund, which will be known as the Africa Growing Together Fund (AGTF), is expected to provide finance to projects over a 10 year period and will be used alongside the AfDB’s own resources. The AGTF will be immediately established, and is expected to be used to co-finance some projects before the end of this year.

The fund will operate within the strategic framework, policies and procedures of the AfDB, including its integrated safeguards, thereby leveraging on the AfDB’s strengths, explained Donald Kaberuka, president of the AfDB Group. He said that the AGTF marks an important milestone in the long-standing relationship between China and the AfDB Group.

“The AfDB’s rich experience, convening power and strong results-oriented culture made the bank China’s ideal partner for channelling resources in support of long-term growth and development on the continent,” said Zhou Xiaochuan, governor of the PBOC.

Charles Boamah, Vice-President and CFO of the AfDB Group, said the fund builds on the success of similar instruments such as the Nigeria Trust Fund, which has been in operation for close to 40 years. He hopes that this model will be replicated with many more regional as well as non-regional member countries of the AfDB.