During the “One Belt, One Road” Summit, China’s President Xi Jinping said that a total of 100 billion yuan (USD 14.5 billion) will be added to the China’s Silk Road Fund as part of efforts to increase financial support for the initiative. By the end of the first quarter this year, the fund has signed 15 projects, with a commitment to invest a total of USD 6 billion, according to data from the fund.
According to the Asian Development Bank, in Asia, the total demand for infrastructure construction is estimated at USD 26 trillion by 2030.
“There is a huge funding gap to be filled in key projects, such as infrastructure construction, in countries and regions involved in the Belt and Road Initiative. It is necessary and timely to inject more money into the Silk Road Fund to leverage more funding sources to close the gap,” said Yi Gang, vice-governor of the People’s Bank of China.
Leslie Maasdorp, vice-president of the New Development Bank, said compared with private investors, State-owned banks and multilateral banks have advantages to ensure financial sustainability of infrastructure projects. He said private investors might not be interested in long-term infrastructure projects with a long return period, but those projects will attract private investors’ attention.
China’s Silk Road Fund has an important role to play while at an early stage of the Belt and Road Initiative’s implementation because it helps leverage additional funding from various sources, according to a vice-governor of China’s central bank.
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