China to invest nearly $15bn in SA
Loss-making Eskom has received a $2.5bn, or R33bn, loan from the China Development Bank
China has pledged to invest $14.7bn in SA and grant loans to Eskom as the two nations seek to strengthen economic ties and increase trade.
The investment pledge and loans were announced after a meeting between President Cyril Ramaphosa and his Chinese counterpart, President Xi Jinping, in Pretoria on Tuesday. Xi is on an official state visit to SA ahead of the 10th summit of the Brazil, Russia, India, China and SA (Brics) nations that begins in Johannesburg on Wednesday. China is SA’s biggest trading partner.
“China is ready to invest and work with SA in various sectors, such as infrastructure development, ocean economy, green economy, science and technology, agriculture, environment and finance,” Ramaphosa told reporters. “We also recognised that although trade figures have grown steadily over the past few years, bilateral trade has not reached its potential. We have thus explored avenues for increasing trade, identifying sectors for future investment and promoting tourism.”
Cash-strapped power utility Eskom secured a $2.5bn long-term loan facility with China Development Bank, taking the funding it’s secured to almost two thirds of what it needs for this year. Port and freight rail operator Transnet agreed to a long-term loan with Industrial & Commercial Bank of China, and Naspers, the owner of Africa’s biggest pay-TV provider, signed a multi-currency facility accord with Bank of China.
“China and SA relations are at a new historical departure point,” Xi, who has visited SA twice before, told reporters. “President Ramaphosa and I had a very productive discussion during which we discussed further taking forward our strategic partnership. We need to build closer high-level engagement.” China will support an investment summit he African nation is hosting in October, he said.
The rand climbed as much as 1.2% against the dollar and was 0.9% higher at 13.3447 at 2.30pm in Johannesburg.
“The rand is firming because our president is making it rain,” said Wichard Cilliers, a trader at Treasuryone. “He has just secured another big investment, this time from China. That means new foreign direct investment inflows.”
With Mike Cohen and Colleen Goko