China Development Bank and Standard Chartered Bank today signed a Memorandum of Understanding (MoU), formalising a strategic partnership that aims to facilitate trade and investment relating to China’s Belt and Road Initiative. Chinese Premier Li Keqiang and UK Prime Minister Theresa May witnessed the signing in Beijing.
The strategic partnership reflects the long-term commitment of both parties to support the Belt and Road Initiative, which is intended to promote economic cooperation among countries along the land and maritime routes from and through Asia to the rest of the world.
The MoU will enable China Development Bank, a policy financial institution under China’s State Council, to make available up to RMB10 billion in aggregate in the next five years to Standard Chartered to facilitate Belt and Road Initiative projects.
Standard Chartered, which has a deep and long-standing presence in 45 of the markets along the proposed Belt and Road Initiative routes, will use this facility to support loans that will fund corporate finance projects and trade finance transactions in those locations. Standard Chartered will make the drawdown decisions, and take the credit risk of the borrowers.
This follows Standard Chartered’s announcement in December that it will be facilitating additional financing to the value of at least USD20 billion by 2020 to support the Belt and Road Initiative. Standard Chartered was involved in over 50 projects related to the Belt and Road Initiative in 2017.
Hu, Huaibang, Chairman of China Development Bank, commented: “China Development Bank has committed to set up special lending schemes worth RMB 250 billion to support Belt and Road Initiative projects during 2017-2019. The Belt and Road Initiative benefits the long-term development of the nations along the route. Leveraging Standard Chartered’s rich expertise and extensive network in Asia, Africa and the Middle East will enable China Development Bank to further enhance the commercial viability and sustainability of those projects.”
Bill Winters, Group Chief Executive of Standard Chartered PLC, commented: “It’s an honour to partner with China Development Bank to boost lending in support of the Belt and Road Initiative. This MoU brings us closer together, and offers more flexibility of funding, especially RMB funding, to support projects along the Belt and Road Initiative routes. Through cooperation, financial institutions can not only pool together and optimise the usage of financial resources, but help clients mitigate or avoid risks.”
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