China firm invests in Africa via project financing

JOHANNESBURG -- The South African Mamba Cement project, jointly funded by China's Jidong Development Group, the China-Africa Development Fund and a South African cement company, inked a deal on financing here Wednesday, marking China's first successful investment through project financing in Africa.

The project, with an investment of $220 million, is situated in Limpopo province, South Africa. The capital fund of the project is $100 million, 51 percent of which is held by Chinese shareholders.

Unlike traditional overseas investment financing, Mamba got $120 million through project financing, which is based on the projected cashflow of the project rather than the balance sheets of its sponsors.

The loans are jointly provided by Nedbank South Africa and Bank of China's Johannesburg office.

Chen Ying, vice-president of China's Jidong Development Group, said the success of the financing deal meant the South African bank's accreditation to Chinese companies.

"Project financing offers Chinese companies a new way to make overseas investments," said Chen.

The project includes a new cement clinker production line with an annual output of 1 million tons, an afterheat electricity generation system with a generating capacity of 26.8 million kilowatt-hours and other supporting facilities.

The electricity generation system together with the cement plant makes Mamba the first cement company possessing waste heat power generation technology on the African continent.

The Mamba project is expected to locally create at least 300 jobs.