Bank governors vow financial support to Belt and Road projects

Chinese bank governors pledged to fund projects related to the Belt and Road Initiative, saying that special loans will be offered to finance cooperation projects among en-route countries in terms of infrastructure, capacity building and finance.

The promise came after Chinese President Xi Jinping announced on Sunday that two of China's banks, the China Development Bank (CDB) and the Export-Import Bank of China (EIBC) will set up special lending schemes respectively worth 250 billion yuan ($3.6 billion) equivalent and 130 billion yuan ($1.9 billion) equivalent to support Belt and Road cooperation on infrastructure, industrial capacity and financing.

Hu Huaibang, Chairman of CDB, vowed to implement the President's proposition, saying the bank will press ahead with the special fund in a timely order. The special loans will give full play to the advantages in development finance.

China's loan commitment to the Belt and Road countries will be fulfilled in the next 3 years or so, Hu predicted. CDB will adhere to the market-oriented operating principle of the fund, offering key support to infrastructure construction, production capacity and financial cooperation, he added.

The projects are funded in a self-liquidating and sustainable development basis, and each project will be put into operation once it is mature. CDB will closely follow a green and inclusive principle when its capital flows to a host country, Hu explained.

He said CDB will pay attention to risk control when mobilizing the special fund, adding that the development financing strategy will be adopted to build market, credit and policy.

A win-win and mutually-beneficial outcome will be achieved if the projects' cash flow and risk control ability is beefed up, which can be achieved by developing and selecting projects independently, Hu continued.

CDB will enhance cooperation with multilateral international development financial organizations, as well as policy- and finance-based financial institutions from home and abroad, to unite various forms of capitals in order to push forward the Belt and Road construction toward more fruits, Hu explained.

Hu Xiaolian, Chairman of the EIBC said the bank always adheres to the market-oriented operating principle to fund the Belt and Road projects, stresses long-term investment and pays attention to risk control, in order to attain small but guaranteed profit as well as sustainable development.

EIBC's special fund will be allocated in infrastructure construction and cooperation in terms of international production capacity, equipment manufacturing, economy and trade, park construction as well as energy and resource sectors, Hu Xiaolian said.

There are so far over 1,200 EIBC-financed Belt and Road projects still with cash balance, signed with 50 or so en-route countries with a total investment of over 700 billion yuan ($105 billion).

The projects include infrastructure connectivity of transportation, electricity, water resource and communication sectors, as well as export of high-tech products, large and complete set of equipment, mechanical and electrical products and resource exploitation.

The projects mainly distribute in Southeast Asia, South Asia and Central Asia, with economic and trade cooperation receiving the biggest sum of loan, followed by resource cooperation, infrastructure construction and industrial investment, data showed.

Statistics revealed that the connectivity of infrastructure construction embraced a faster growth in 2016, with the contracting value increasing 150 percent year on year.