President Xi Jinping’s One Belt One Road initiative is rapidly gaining momentum, and will require a vast number of projects during the next decade, in sectors such as road, rail, airports, ports, shipping, oil & gas, and power generation.
The Maritime Silk Road is connecting China with southeast Asia, then westwards to the coast of Africa, and northwards to the ports of Athens, Piraeus and Venice.
Meanwhile the overland Silk Road is putting in place an economic belt involving road & rail links, oil & gas pipelines, and power generation plants, taking in countries such as India, Pakistan, Kazakhstan, Iran, Turkey, and on into the European Union.
This ambitious strategic initiative will re-define the links between Europe and China- and promote economic development in all the countries along the Silk Road, with the new transport links creating a new economic corridor.
President Xi visited Warsaw in June 2016 as part of the OBOR initiative, signalling the acceleration of activity in what China designates as the Central and Eastern European Countries (CEEC), which fall under the so called “16 plus 1” framework. In addition to a long list of projects in Poland, there is also growing activity in countries such as Bulgaria and Serbia.
The financing requirements for OBOR are complex, and are made more so because China is determined to bring in private institutional capital alongside financing from the state owned Chinese banks and the Asian Infrastructure Investment Bank (AIIB). This will require new and innovative debt structures, denominated in Renminbi, Dollars, Euros and a wide range of local currencies. These will include Green Bonds, and what is expected to be an important new class of long term infrastructure bonds sold to insurance companies and pension funds.
Each week Belt & Road Online will chart the latest developments as the 21st Century Silk Road takes shape, and look at the latest transactions to close, and upcoming projects in the pipeline. It will highlight the roles of bank arrangers, law firm advisors and consultants, whose expertise will be needed to meet the complex financing requirements of the many hundreds of projects that make up this new economic corridor connecting East and West.