Lee Xin En, Straits Times
China’s largest bank is throwing its weight behind Singapore organisations and companies to join in the One Belt, One Road initiative.
A raft of agreements to increase Sino-Singapore cooperation was signed yesterday between the Singapore branch of the Industrial and Commercial Bank of China (ICBC) and five local parties.
One agreement was inked with the Singapore Business Federation (SBF), extending up to 50 billion yuan ($10.2 billion) in funding to SBF members for infrastructure investments under the initiative.
This brings total financing available for Singapore companies to at least $100 billion, including International Enterprise (IE) Singapore’s deals with three Chinese banks that provide over $90 billion in funding.
The figure is significant, considering that the Asian Infrastructure Investment Bank (AIIB) has US$100 billion (S$136 billion) in capital, which could support lending of between US$200 billion and US$500 billion, according to a European Commission estimate.
Memorandums of understanding were also signed by Singapore Press Holdings, Singapore Exchange (SGX), Surbana Jurong and Sinochem International Corporation at an inaugural forum on financing for One Belt, One Road infrastructure projects yesterday.
Surbana Jurong chairman Liew Mun Leong said its agreement would allow the firm to offer its clients a full suite of financial and engineering expertise for urban infrastructure projects.”Our expertise in urban planning, engineering, project management and facilities management services fully complement ICBC’s financial-related services,” said Mr Liew, who also chairs Changi Airport Group.
ICBC chairman Yi Huiman said the bank’s Singapore branch has 20 Belt and Road projects in reserve that involve about US$3 billion of financing. It also has more than 200 projects in reserve globally, with a total investment of more than US$200 billion. “We will provide enterprises with ‘one-stop’ financial services including international settlement… that reflect Singapore’s market characteristics and build on ICBC Group’s resources,” he said.
The bank, which organised the forum with Surbana Jurong, will also create a one-stop service system that includes information consulting and project matchmaking.
Mr Lim Hng Kiang, Singapore’s Minister for Trade and Industry (Trade), noted that the Asean region will need an estimated US$60 billion annually until 2022 for infrastructure. He said Singapore and Chinese companies share complementary strengths and can work together in third-country markets.
Mr Lim cited the partnership of Singaporean engineering company ISDN with China Huadian Engineering, one of China’s largest industrial players, to develop mini-hydropower projects across Indonesia. “I would like to encourage more of such fruitful partnerships between Singapore and China,” he added.
In a separate panel on infrastructure financing, Mr Kow Juan Tiang, group director of environment and infrastructure solutions at IE Singapore, emphasised the “tremendous demand for infrastructure”, countering the claim that policy banks like the AIIB are crowding out commercial banks. “Forget all the numbers, what is needed is one Singapore to be developed every week for the next five years… that’s the magnitude we are talking about,” he said.
Mr Kenneth Loo, president of the Singapore Contractors Association, said the Belt and Road initiative would provide a “good start” for local contractors to move into the region, but added that it would be challenging for individual Singaporean companies to get financing for such projects on their own.
Source: Strait Times