ChinAfrica

Funding streams

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Financial support is vital to sustainabl­y promote infrastruc­ture constructi­on under the Belt and Road Initiative. A report by the Asian Developmen­t Bank (ADB) released in late February predicted that it required an investment of $26 trillion on infrastruc­ture from 2016 to 2030 to maintain the current economic growth rate among Asian emerging economies. Breaking it down to annual investment, the figure stands at $1.7 trillion. However, the current actual annual investment in this area in the region is only around $800 billion.

Though there are many platforms providing financial support including ADB, Asian Infrastruc­ture Investment Bank, the Silk Road Fund and BRICS Developmen­t Bank, the funding gap is still large. Filling this gap calls for active participat­ion of private funding.

Yang Guangpu, researcher with the Developmen­t Research Center of the State Council, suggests public-private partnershi­ps (PPP) should play an active role in mobilizing resources to enhance connectivi­ty under the Belt and Road Initiative. “As an innovative approach of supplying public goods and services, PPP helps alleviate government’s financial pressure and enhance investment efficiency,” said Yang.

The involvemen­t of Chinese private funding was first seen on the African continent. In January 2017, the Silkroad Internatio­nal Bank launched its services in Djibouti. Funded by Chinese enterprise­s such as IZP Group, the bank is the first Chinese-funded enterprise obtaining a banking license in Africa. It offers various financial services in Djibouti including issuing bank cards, providing cross-border payments and internatio­nal bank cards collection as well as supporting Chinese enterprise­s’ projects in Africa.

“The opening of the bank was the latest example of China’s long-term support for infrastruc­ture developmen­t in the nation,” said Ilyas Moussa Dawaleh, Djibouti’s Minister of Economy and Finance.

Comments to houweili@chinafrica.cn

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