China Everbright Group (CEG) and the Eastern and Southern African Trade and Development Bank (TDB) have partnered to drive the financing of green projects under China’s Belt and Road Initiative in Africa.
The two have signed a green finance co-operation protocol aimed to establish a long-term strategic partnership to finance and support green projects such as clean energy, solid waste treatment, energy saving and emission reduction, intelligent manufacturing and green technology.
“TDB co-operates closely with many development finance institutions in these areas, and is now pleased to scale up its efforts with CEG,” says Admassu Tadesse, TDB president and chief executive.
The agreement was signed on April 28 on the sidelines of the second Belt and Road Forum held in Beijing.
“Catalysing capital to finance environmentally sustainable infrastructure investments under the Belt and Road Initiative (BRI) is expected to create significant positive spill-over effects in TDB member states,” TDB notes in a statement.
TDB, formerly PTA Bank, is a multilateral, treaty-based development financial institution focusing on Eastern and Southern Africa. It has 36 shareholder countries and institutions, with China being one of two non-regional members, represented by the People’s Bank of China. CEG is a Chinese state-owned financial holding company.
Africa plays an important role in the Chinese BRI, with China having recently upped its stake on the continent. In September, speaking at the Forum on China-Africa Co-operation in Beijing, China’s President Xi Jinping pledged another US$60bn for African development over the next three years.
This funding will go towards agricultural modernisation, infrastructure connectivity, green development and healthcare projects. Xi also said China would implement trade facilitation programmes and hold free trade negotiations with interested African countries and regions.
As for TDB, the new partnership with CEG forms part of its recent push to step up its climate commitments. According to the bank, US$1.4bn of its portfolio directly contributes to the sustainable development goals set by the UN in the 2015 Paris climate agreement. 69% of TDB’s energy portfolio is in renewables, with “much more in its pipeline”, it recently said.
The partnership follows the signing in March of an agreement with the French development bank AFD towards a US$120mn credit facility that will be targeting climate-oriented projects in the African regions covered by TDB.