Temasek Holdings (Private) Limited, headquartered in Singapore, will invest US$3.1 billion in the Bank of China (BOC) for a 10 percent stake, a BOC spokesman said in Beijing Wednesday.

Temasek will earmark another US$500 million at the initial public offering (IPO) price during the BOC's planned international IPO, said the spokesman.

According to an agreement signed here, Temasek will invest in BOC through the Asia Financial Holdings Pte. Ltd (AFH), a wholly-owned subsidiary of Temasek.

Pursuant to the agreement, AFH will assist BOC in improving corporate governance, including the right to nominate a suitable candidate for election to BOC's board of directors.

Temasek will also help BOC develop talent pool with its network in Asian financial industry.

The strategic investment of Temasek will help BOC deepen the reform and improve the bank ownership structure, said the spokesman.

Temasek said that the investment is so far their largest investment in China. The long-term investment demonstrates its confidence in Chinese economy.

(Xinhua News Agency September 1, 2005)