China is setting up a $1bn fund with the Inter-American Development Bank to make equity investments in Latin America, in a new move into financing in a region where it is already a major trade partner.
The fund, which should start operations this year, is a partnership between China’s state-run Export-Import Bank and the IDB. Each side will put in $150m and the two banks are currently selecting asset management firms to manage the investments and raise funds from the markets, the IDB says.
“We are looking to focus on areas where Latin America has enormous deficiencies, like infrastructure,” Luis Alberto Moreno, IDB president, told the Financial Times in Uruguay at the bank’s annual meeting. “It’s something that is quite novel and it is a route which we hope to continue to open up with the Chinese authorities.”