The China-Africa Development (CAD) fund, the country's biggest equity fund targeting African investments, is set to expand to $5 billion in the coming five years, said Chi Jianxin, president of the fund.
"We expect to finish raising the fund's second phase of $2 billion by the end of this year and will kick off the third phase afterwards," Chi said in an exclusive interview with China Daily.
Based on current operations, the size of the fund may eventually exceed $5 billion, even though several conditions, such as an efficient exit channel, are required, he said.
The CAD fund was set up in 2007 as China's major investment vehicle in Africa, after President Hu Jintao pledged to establish it at the Beijing Summit on China-Africa Cooperation in 2006.
An initial sum of $1 billion was provided by China Development Bank (CDB), and the fund was planned to expand to $5 billion finally, although no specific timetable had been drawn up.
CDB will also help in the second phase fundraising, said Chi, who was the director of CDB's Investment Banking Department before his appointment as president of the fund upon its foundation.
"We expect more capital from other institutions will join in during the third round of capital raising," he said.
So far, the fund has decided to invest $1.3 billion, including $600 million that has already been invested, in more than 40 projects covering more than 20 countries on the African continent.
"We're very cautious on our investments when making decisions, " Chi said. The fund's investment focuses mainly on the processing industry, including construction materials, automobiles, and household electrical appliances, in addition to agriculture, mining, and infrastructure areas.
All the projects will facilitate more than $5 billion additional capital investment to the continent, and will provide more than 100,000 jobs, Chi said.
The fund, for instance, is in talks with Chery Automobile Co to invest in an automotive assembly plant project in Africa.
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