China’s Silk Road Fund is establishing a joint energy infrastructure investment platform in partnership with the US’s GE Energy Financial Services, according to the State Administration of Foreign Exchange.
The new platform will target projects in power transmission, new energy, and oil and gas sectors in the countries under the ‘One Belt, One Road’ initiative. Further details regarding the platform were not disclosed.
The OBOR initiative was proposed by President Xi in 2013 as a masterplan to build infrastructure and connect Eurasian countries along the ancient Silk Road trade routes for trade and economic growth. More than 60 countries are currently participating in the scheme.
The Silk Road Fund-GE EFS partnership aims to strengthen collaboration on high-end manufacturing industry between China and the US, as well as to boost economic development of the regions where both are present, Silk Road Fund said in a statement.
Founded in December 2014, Silk Road Fund was designed to finance the OBOR initiative, with $40 billion foundation funding from China’s foreign reserves, China Investment Corporation, and two policy banks – the Export-Import Bank of China and China Development Bank.
In May this year, Beijing pledged to inject an additional 100 billion yuan ($15 billion; €12.8 billion) into the vehicle to help meet the enormous funding gap in the region. It was followed by the completion of Silk Road Fund’s latest deal in July – the acquisition of a 5 percent stake in Autostrade per l’Italia, an Italian toll road operator, in a €1.48 billion deal with an Allianz-led consortium.
GE EFS, on the other hand, has been investing debt and equity in the global power sector for more than 35 years. Its latest move in Asia included raising a 75 billion yen ($666 million; €567 million) solar-focused fund in Japan with Development Bank of Japan as a cornerstone investor in June.