July 28, 2018: China has pledged to invest $14.7 billion in South Africa and grant loans to its state power utility and logistics company as the two nations seek to strengthen economic ties and increase trade.

The commitment follows similar promises from Saudi Arabia and the UAE and bolsters South African President Cyril Ramaphosa’s campaign to lure $100 billion in investment to South Africa over the next five years, as he seeks to boost a flagging economy ahead of elections next year. The investment pledge and loans, the biggest yet from the Asian nation to South Africa, were announced after a meeting between Ramaphosa and his Chinese counterpart, Xi Jinping, in Pretoria.

“China is ready to invest and work with South Africa in various sectors,” Ramaphosa stated. “We also recognised that although trade figures have grown steadily over the past few years, bilateral trade has not reached its potential.”

Xi was on an official state visit to South Africa before the 10th summit of the BRICS nations (Brazil, Russia, India, China and South Africa that aim to bolster trade and political ties. China is South Africa’s biggest trading partner.

Cash-strapped power utility Eskom Holdings SOC Ltd. secured a $2.5 billion 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 SOC Ltd. agreed to a long-term loan with Industrial & Commercial Bank of China Ltd, and Naspers Ltd, the biggest investor in Chinese internet giant Tencent Holdings Ltd, signed a multi-currency facility accord with the Bank of China.

The other deals announced were: master agreement of $983 million for Industrial and Commercial Bank of China with Standard Bank of South Africa Ltd; framework agreement of $3 billion on financing and insurance cooperation between China Export and Credit Insurance Corporation and Standard Bank; special facility agreement of $500 million for the development of small and medium enterprises in South Africa and other African regions.

China will support an investment summit that the African nation is hosting in October, Ramaphosa said.

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