New projects on horizon as China-Brazil investment fund launches

Officials from China and Brazil launched a joint investment promotion fund on Tuesday to increase productive capacity.

The fund, which is in operation now, starts with an initial investment of 20 billion US dollars to finance projects in Brazil which are of interest to both countries.

The fund is expected to serve as a mechanism to promote investment by bringing the public and private sectors of both countries together to invest in infrastructure, manufacturing, agribusiness and technology projects.

Representatives from the China Latin American Industrial Cooperation Investment Fund (Claifund) and Brazil's Ministry of Planning made the announcement at the Brazil Investment Forum (FIB 2017) in Sao Paulo.

At the signing ceremony, Chinese Ambassador to Brazil, Li Jinzhang, said the fund is the result of long-running joint efforts and reaffirms both countries' ties.

"With our comprehensive strategic partnership, Brazil is a priority country for China's strategy of expanding productive capacity. The China-Brazil Fund guarantees the financial mechanism to expand cooperation," Li said.

"The fund reflects a higher level of cooperation for both countries and will create a new model of financial cooperation," he added.

Brazilian Planning Minister Dyogo Oliveira said the fund has gone into operation at the right time, given that Brazil's two-year recession, the longest in its history, is showing signs of coming to an end.

"This launch is marked by particular importance, as it confirms the confidence between Brazil and China," Oliveira point out. "It is taking place at a time when we and our international partners are seeking support for projects in infrastructure, energy and technology," he said.

The mechanism is the first of its kind in Latin America, the minister said, as Brazil becomes the first country in the region to participate in a fund jointly governed by China.

Projects approved by the fund's board of directors will receive financing from Claifund, the Brazilian Development Bank (BNDES) and Brazil's federal savings bank, Caixa Economica Federal.

Priority sectors for investment include logistics and infrastructure, energy and mineral resources, high technology, agriculture, agribusiness and agricultural warehousing, manufacturing, and digital services.

According to the agreement, for every dollar put up by Brazil's financing sources, China will contribute three, with the initial 20 billion US dollars fund made up of 5 billion US dollars from Brazil and 15 billion from China. Both sides have said they are willing to provide more financing, if projects call for it.

Brazil's Agriculture Minister Blairo Maggi praised the creation of the China-Brazil Fund.

"China's trust toward Brazil is ever greater. Brazil is a great supplier of raw materials, trade is always growing. The fund is very important and goes in this direction," he said.

He also called for new Chinese investments in Brazil and reiterated that his country is a safe place to do business and that contracts would be honored despite an ongoing political crisis.

China and Brazil established a comprehensive strategic partnership in 2012, three years after China became Brazil's leading trade partner.

(CGTN)