KIGALI, May 22  -- The People's Bank of China and the African Development Bank (AfDB) have signed a new financing agreement worth 2 billion U.S. dollars setting up an Africa-wide investment vehicle dubbed "Africa Growing Together Fund" (AGTF). The resources from the AGTF are expected to be provided over a 10-year period and will be used alongside the AfDB's own resources to finance eligible sovereign and non-sovereign guaranteed development projects in Africa.

The financing deal was signed on Thursday by AfDB president Dr Donald Kaberuka and the Governor of the People's Bank of China, Zhou Xiaochuan, on the sidelines of the AfDB annual meetings currently underway in Kigali. The importance of this signature says a lot about the relationship of China and AfDB, Kaberuka said, noting that China is a friend of Africa that has invested in infrastructure and natural resources.

"But now this is the first time in Africa, we are taking a multilateral route," Kaberuka noted.

China, he added, did not have to do this but they have done so because they want to assist in the development of Africa.

Kaberuka said China was inspired by the bank's strong record, adding "we look after our shareholders money, we invest well, and we have robust financial systems."

Governor Zhou Xiaochuan commended the AfDB's work over the last 50 years and the great strides it has made in promoting growth and alleviating poverty.

China, he said, would like to go further step in partnering to develop Africa's industrialization and infrastructure. "We are strengthening the financial cooperation and this new initiative is supplementary to our traditional cooperation with Africa."

He expressed optimism that over the next decade, there will be growth and much higher prosperity in increasing people's living standards on the continent.

"China would like to be part of this development," Zhou said.

The AGTF is expected to be immediately set up to be used to co- finance some projects before the end of this year.