The Singapore branch of Industrial and Commercial Bank of China has agreed to back Singapore-based businesses seeking Asian infrastructure investment opportunities under the “One Belt and Road” initiative.
The memorandum of understanding signed with the Singapore Business Federation (SBF) last week will see the world’s biggest bank provide SBF member companies with funding of up to 50 billion yuan ($7.5 billion; €6.7 billion) in project financing and related professional services as they bid for OBOR infrastructure projects.
As Singapore’s sole renminbi clearing bank, ICBC more generally intends to provide financial services and project financing to companies looking to get involved in OBOR, a Beijing-led initiative that spans over 60 countries.
The partnership with the business chamber follows a similar collaboration formed in June between ICBC and International Enterprise Singapore, a Singapore government agency that helps domestic groups capture OBOR infrastructure opportunities.
Since November 2015, IE Singapore has formed partnerships with Bank of China, China Construction Bank (CCB) and ICBC to help catalise more than S$90 billion ($66 billion; €59 billion) worth of financing towards OBOR projects in Southeast Asia, with CCB contributing S$30 billion to the scheme.
Although ICBC didn’t disclose the amount it intends to disburse alongside IE Singapore, the bank has said it would set up a project finance team in Singapore and potentially launch an infrastructure fund to invest in OBOR projects.
CCB also plans to set up its first centre for project financing and related services in Singapore by next year. Last month, CCB issued 1 billion yuan worth of OBOR infrastructure offshore renminbi bonds through the Singapore Stock Exchange, the proceeds of which will be used to finance OBOR-related projects.
Earlier this month, IE Singapore co-organised a roundtable in Beijing with China’s National Development and Reform Commission, the lead agency overseeing OBOR strategic developments and the country’s economic planner.
The roundtable, the second in its series, was attended by 14 Singapore companies operating across the infrastructure, transport and logistics sectors and 18 Chinese state-owned enterprises and private businesses. Participants included China’s Railway Construction Corporation, Machinery Engineering Corporation, Metallurgical Corporation and Ping An Bank, as well as Ascendas-Singbridge, Ascott, Meinhardt, Keppel Land, Surbana Jurong and YCH on Singapore’s side.