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China Merchants Group to invest in Djibouti free trade zone

China Merchants Group to invest in Djibouti free trade zone
China Merchants Group (CMG) has formed a multi-party joint venture to invest in Djibouti International Free Trade Zone, expanding from the group’s existing interest in the port of Djibouti and helping to promote the country’s economic development.

An asset joint venture, formed by CMG’s subsidiaries China Merchants Port Holdings Company, Cheer Signal and China Merchants Investment Development Co (CMID), will act as a platform for the parties to co-invest in Djibouti International Free Trade Zone. CMG has proposed to invest $30m into the joint venture.

The China Merchants Group’s asset joint venture will have a 30% stake in the Djibouti asset company. Great Horn Investment Holdings, subsidiary of Djibouti Ports & Free Zones Authority will take 60% interest and China’s Port of Dalian Group will own 10%.

The Djibouti asset company will invest in and finance the development rights to develop commercial and infrastructure projects within Djibouti Free Trade Zone.

“The group has, in recent years, been actively exploring and (…) capturing available opportunities overseas as one of the means to effectively add new growth drivers to its existing and sustainably growing ports business,” China Merchants Port said.

China Merchants Port has over the years invested into the port of Djibouti, which lies at the mouth of Red Sea, making the port an ideal transhipment hub for maritime cargoes passing in and out of East Africa.

“The investment and development of the Djibouti International Free Trade Zone will lagrely promote economic development of Djibouti and is a replication of the China Merchants group’s ‘Port-Zone-City’ development model which has demonstrated huge success in Shekou,” China Merchants Port stated.