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ADB to Invest in China's Small, Medium Enterprises
The Asian Development Bank (ADB) said Tuesday that it has approved an equity investment of 25 million U.S. dollars in a fund to help spur the growth of non-state small and medium scale enterprises (SMEs) in China.
The ADB said through the fund named Liberty New World China Enterprises Investments Limited Partnership, it will catalyze foreign investments into China to support the government's efforts to stimulate the growth of SMEs in the country.
"A dynamic private sector will contribute to economic growth and help create employment opportunities," said the ADB in a press release.
The fund will have two sponsors -- New World Group (NWG) from Hong Kong, and Liberty Financial Group from the United States, the bank said.
The NWG will help identify and manage the investee companies for the fund. In addition, the NWG is committed to match, dollar-for-dollar, investments made by the fund in all of its investee companies.
The investee companies will be assisted not only by the provision of equity capital but also by the infusion of know-how in modern marketing, management and governance techniques, said the ADB, adding that leading international companies will be invited to co-invest in individual projects.
According to the ADB, the target is to raise 100 million dollars for the fund at initial closing. Through subsequent closing, the fund's size could be increased to 300 million dollars, subject to demand.
The ADB said initial investments will be made in 20 to 30 enterprises with good growth prospects while the size of investment in each company is expected to fall largely between 1 million dollars and 5 million dollars.
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