Cameroon takes $743 mln China loan for water project

Written by Reuters

Thursday, 16 December 2010 09:09

YAOUNDE (Reuters) - Cameroon secured a 366 billion CFA franc loan from the Export-Import Bank of China to fund a water distribution project, the government said on Wednesday.

The programme will reach 2 million people in the capital city Yaounde and villages along the pipeline, marking a significant infrastructure boost for the central African state in which the United Nations says only half the 19.5 million population have access to clean water.

The project should begin in January, Water and Energy Minister Michael Tomdio said on state radio.

China's Exim Bank, one of three policy banks that extend credit in line with government initiatives, said last month it sees plenty of opportunity to extend loans in Africa as commercial banks steer clear of risk.

Chinese investment across Africa has grown rapidly as the country seeks to secure access to raw materials to feed its breakneck economic growth.

Cameroon's government hired the China National Machinery and Equipment Corporation on a 28-month contract for the water project, which will involve construction of a 56-kilometer pipeline from the Sanaga River.

The total cost will be 430 billion CFA, Tomdio said. China's Exim Bank will provide Cameroon with a 366 billion CFA "soft loan" and the remainder will come from Cameroon's government, he said.

No further details on the loan were available.