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China set to finance Guinean infrastructure

A Chinese investment fund is preparing to enter a joint venture with the military-backed government of Guinea in West Africa in which it will provide up to $7bn of financing for infrastructure projects in return for oil and mineral stakes, according to a report in the Financial Times.

A Chinese investment fund is on the verge of investing billions of dollars in infrastructure projects in Guinea, according to the Financial Times.

Citing Guinea’s minister of mines Mohamed Thiam, the newspaper said the African country’s military-backed government is in discussions with China regarding a deal which would see it provide up to $7 billion for infrastructure development in Guinea in return for claims to mineral projects and oil prospects.

It said the China International Fund would provide backing for projects ranging from power stations to the establishment of a new airline. The Guinea Development Corporation will be 75 percent owned by the Chinese fund. It will be based in Singapore and will carry out a range of infrastructure projects, including those in the transport, energy and water sectors.

Captain Moussa
Dadis Camara

The Hong Kong-based China International Fund has also reportedly signed a memorandum of understanding with the Guinean government and Angolan state-owned oil firm Sonangol, to search for oil in the country. The fund would also become involved in mining projects. Guinea is located on Africa’s west coast south of Mali and possesses the largest deposits of the mineral bauxite in the world in addition to sizeable gold, diamond and uranium resources.

Angola and the Democratic Republic of Congo have also recently signed similar agreements with China, exchanging stakes in oil and mineral reserves for financing for infrastructure projects, the FT said.

However, the reported Chinese investment has faced stern criticism, with the $7 billion figure put forward more than double Guinea’s GDP of $3 billion: “You are talking thousands of kilometres of highway and road without seeing that our economy cannot maintain such infrastructure,” opposition leader Sidya Touré was quoted as saying in the paper.

Guinea, led by self-appointed head of state Captain Moussa Dadis Camara, could face heavy trade sanctions after violent crackdowns on anti-government protests last month in which 150 people were reportedly killed. Elections in the country are scheduled to take place in January.