Banks Financing BRI Projects: Role of Sustainable Finance

Differences in privately owned companies versus publicly owned.

China Development Bank (CDB), China Eximbank, and
the Big Four state-owned commercial banks—Agricultural Bank of China (ABC), Bank of China (BOC), China
Construction Bank (CCB), and Industrial and Commercial
Bank of China (ICBC)—are the leading Chinese banks currently financing projects in BRI countries. The six banks
have accumulated rich experience financing domestic
infrastructure and have been increasingly expanding their
overseas business since China issued its “Go Global” policy
in 2001 (Institute of International Finance 2014). The participation of Chinese policy, development, and commercial
banks in the BRI means that BRI countries have access to
a wide range of financing options at different terms.
The Chinese government established the SRF, which is
primarily an equity investment fund, to complement bank
financing for BRI countries. In 2014, China made an initial
capital contribution of $40 billion and added another
$14.5 billion in 2017, bringing the total capital to $54.5
billion. In addition to the SRF, Chinese enterprises are
another important source of equity investments. Following the announcement of the “Go Global” strategy, China’s
OFDI, a measure of overseas equity investments, has been
slowly increasing. After a brief pause after the 2008–09
global financial crisis, Chinese OFDI accelerated, and in
2016, China became the second-largest country in terms of
OFDI flows (Figure 3)