How to Get Financing from China-Part I Who are the Chinese ODI Lenders and Equity Investors

By Edwin Li (李治国)

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In the chaos of the “new normal” and deglobalized world, emerging markets and developing countries (EMDCs) are facing and falling into a dilemma of fund shortage.

The high interest rate of US dollars maintained by the Fed over 20 months has inevitably driven up the capital cost in the developed countries and EMDCs. It impacted the funds to flow to the projects in EMDCs who are hungry and thirsty for new capital to sustain and revive their economy. Based on CNN, the Fed seems more prudent to make a confirming decision in its March meeting on when to cut the rate in 2024[1].

World Bank shared a press release with the global public on February 28, 2024, that it will reform and restructure its guarantee business lines to improve accessibility and efficiency. A target of tripling annual guarantee issuance to $20 billion by 2030 is particularly noteworthy by the public and private sectors[2].

Although some EMDCs have borrowed a lot from China in the past decade with the implementation of the China Belt and Road Initiative (BRI), they may have not obtained as many new loans as they expected from China since COVID-19. The lowest BRI finance and investments happened in 2021 with the amount of USD68.7 billion as shown in the China BRI Investment Report[3] published by the Green Finance & Development Center (CFDC), at Fudan University. Furthermore, the Global Development Policy Center at Boston University updated in January 2023 that it recorded only 28 new loan commitments in 2020 and 2021 worth a combined value of $10.5 billion, the lowest in recent years. Therefore, it is not a surprise to see a significant equity investment by the Chinese investors in 2023 as shown in CFDC’s 2023 report[4] and data from China Global Investment Tracker[5] published by the American Enterprise Institute.

When the overseas development finance peaked in 2016, China unconsciously adjusted its overseas lending policies and standards. Finally, the term “Small or Beautiful” (Xiao Er Mei in Pinyin) was officially announced in 2021 to the market[6]. This indicates that China veered from extensive lending to more prudent, reasonable, and risk-controlling lending. This was further reiterated in the government work report[7] delivered to the second session of the 14th National People’s Congress of the People’s Republic of China on March 5. It says that China “will steadily advance cooperation on major projects and implement many “small and beautiful” projects for improving the people’s wellbeing” in the part discussing high-quality BRI cooperation.

In such a “new normal” scenario of lending strategy and standard, China’s BRI lending is declining but not out[8].

In comparison with the high interest of US dollars and Euros, the downward interest rate of the Chinese Renminbi (RMB) will reduce the capital cost of the borrowers. RMB LPR reached the historical lowest level since 2019 at 3.45% for a 1-year loan and 3.95% for a term of 5 years or above[9] based on the People’s Bank of China (PBOC) announcement on February 20, 2024. On the other hand, the borrowers also need to balance the foreign exchange rate risks in their RMB borrowing which is the preferred currency by the Chinese financial institutions (CFIs).

Our series of articles will elaborate few key factors that foreign borrowers should know before officially commencing their financing from China.

This article is Part I on which institutions or entities in China foreign borrowers should approach to finance their projects located outside China.

A. The Government Agencies

The borrowers, esp. from EMDCs, should resort to the following China government agencies if they want to obtain a grant or zero-interest loan.

a) China International Development Cooperation Agency (CIDCA)

By Article 6 of the Administrative Measures for Foreign Aid effective on October 1, 2021 (AMFA), the responsibility of CIDCA is to formulate strategic guidelines, plans, and policies for China foreign aid, promote the reform of foreign aid methods, manage in a centralized manner the size and use of foreign aid funds, prepare annual budgets and final accounts of foreign aid projects, determine foreign aid projects, oversee and assess the implementation of foreign aid projects, and organize and execute international exchange and cooperation on foreign aid.

One of CIDCA’s key functions is the preparation of annual budgets for foreign aid projects, which was assigned to the Ministry of Foreign Affairs (MOF) before AMFA. The item of foreign aid was not compiled into the 2021 Budget of MOF but in the same year budget of CIDCA.

Having the projects in the foreign aid project pipelines is the priority. How many projects are presented to CIDCA will decide how much fund is allocated to foreign aid in CIDCA’s budget. The government of the project host country needs to submit the projects to the embassy of China in such country or directly to MOF if the projects can meet the requirements set in AMFA.

b) MOF

MOF still sits in an important and front position after losing its budget decision-making power through its embassies in the project host countries. The embassies are responsible for the overall administration of foreign aid in the respective countries where they are located. Therefore, MOF will mostly rely on the analysis and advice from the embassies to judge the qualification of the projects.

The relevant government departments of the project host countries need to approach the embassies of China in such countries and discuss the projects to be included in the pipeline of CIDCA for China foreign aid. Alternatively, they also can utilize possible direct communications with MOF to present such projects.

On the other hand, one of the purposes of China’s foreign aid is to consolidate and enhance the bilateral relationship between China and the foreign aid recipient country. When the borrowers from various EMDCs compete with each other in an application for China foreign aid, the focus will be on who had, is holding, and will establish a more friendly and long-term relationship with China.

c) The Ministry of Commerce (MOC)

MOC is responsible for the implementation of foreign aid projects recommended by MOF and decided by CIDCA.

Since the MOC appointed a commercial counselor in each embassy of China in the project host country, the MOC also has the right to recommend the proper project to CIDCA.

MOC not only takes care of the implementation of foreign aid projects outside China, but it significantly holds the power to select Chinese entities who are qualified to implement the projects, including EPC contractors, technical service providers, equipment and materials suppliers, engineers and designers, etc. The Chinese contractors of foreign aid projects must be an entity included in the MOC list for different categories.

B. Financial Institutions

Generally, CFIs can be divided into banking financial institutions (BFI) and non-banking financial institutions (NBFI). Both are the fund sources the borrowers can approach depending on the nature and financing structure of the project.

a) BFI

i. Policy Banks

There are three policy banks in China, the Export-Import Bank of China (CEXIM), the China Development Bank (CDB), and the Agricultural Development Bank of China (ADBC).


CEXIM is a state-funded but independent legal entity dedicated to supporting China’s foreign trade, investment, and international economic cooperation. CEXIM has thirty-two branches in mainland China, one branch in France, and six representative offices in Hong Kong, Russia, Chile, Morocco, South Africa, and Poland.

CEXIM’s financial support goes specifically to foreign trade, cross-border investment, BRI projects, international industrial capacity and equipment manufacturing cooperation, science and technology, cultural industry, and “going global” endeavors of small and medium enterprises.

The concession loan stipulated in the AMFA will be implemented by CEXIM. A sovereign guarantee may be mostly required for such loans and buyer’s credit. The former has a lower interest rate than the latter and does not require the equity fund from the project host government. CEXIM also provides overseas investment loans and EPC construction loans which will be easier for Chinese borrowers to apply and utilize in overseas projects. The on-lending is the option for foreign financial institutions to get funds from CEXIM.

2. CDB

When established in 1994, CDB was categorized as a policy bank. In 2017, it was officially defined as a development finance institution (DFI) by the China Banking Regulatory Commission (replaced by the National Financial Regulatory Administration in 2023, NFRA).

Among the others, CDB mobilizes funds and channels them towards BRI projects, international cooperation in industrial capacity, equipment manufacturing, infrastructure connectivity, energy and resources, and Chinese enterprises “going global”.

CDB has forty-one branches in mainland China one branch in Hong Kong, and eleven representative offices in Cairo, Moscow, Rio de Janeiro, Caracas, London, Vientiane, Astana, Minsk, Jakarta, Sydney, and Budapest.


Founded in 1994, the ADBC is the only one of the three policy banks focusing its business on the domestic market.

Among the above three banks, CEXIM and CDB are qualified Panda bond underwriters. Foreign borrowers, sovereign or non-sovereign, may also put Panda bonds in their financing option list with the ease of regulation on utilization of funds raised by Panda bonds issuance. AIIB and Egypt are the most recent Panda bonds issuers in the past few months. This is regarded as the effort of China’s RMB internationalization.

ii. State-owned Commercial Banks (SOCB)

There are six SOCBs in China:

Name Abbreviation
Industrial and Commercial Bank of China* ICBC
China Construction Bank* CCB
Bank of China* BOC
Agricultural Bank of China ABC
Bank of Communications BOCOM
Postal Savings Bank of China PSBC

Except for PSBC, the rest five SOCBs are involved in China’s outbound direct investment (ODI) lending and investment. BOC has been always active in overseas markets. ICBC’s overseas operation has been declining in the past few years due to its reckless expansions in the first five years of BRI. CCB is more often seen in the lenders list recently with its new overseas lending strategy. ABC and BOCOM seem prudent in their overseas lending.

The branches or subsidiaries of BOC, CCB, and ICBC outside China can be the first contact for foreign borrowers if the project or SPV falls into the covering region thereof. However, if the lending amount exceeds USD50 million, the headquarters of such banks in China may be involved for approval.

iii. Commercial Banks

With no direct shareholding of the Chinese government, 12 commercial banks in China have national-wide operations.

Name Abbreviation
China Merchants Bank CMB
Shanghai Pudong Development Bank SPDB
Industrial Bank CIB
China Minsheng Bank CMSB
China Everbright Bank CEB
Ping An Bank PAB
Huaxia Bank HXB
China Guangfa Bank CGB
China Zheshang Bank CZB
China Bohai Bank CBHB
Hengfeng Bank / Evergrowing Bank HFB

In most cases, none of these 12 commercial banks is willing to lend by itself to foreign borrowers without any Chinese background. They prefer lending together with the SOCBs and/or Policy Banks in a syndicated loan or with multilateral development banks (MDB) through A-B loans to mitigate the risks that they cannot recognize and mitigate.

CMB, CMSB, CITIC, and PAB are the rational and practical choices for foreign borrowers.


In so many types of NBFIs, we picked up a few of them who are directly or indirectly involved with China ODI and BRI projects.

i. Asset Management Company (AMC)

After China Huarong Asset Management Co., Ltd. was merged into CITIC Group in 2023, only three AMCs left, China CINDA Asset Management Co., Ltd. (CINDA), China Orient Asset Management Co., Ltd. (COAMC) and China Greatwall Asset Management Co., Ltd. (GWAMC).


CINDA’s overseas business is implemented by its HK subsidiary, China Cinda Asset Management (HK) Holding Co., Ltd. (CINDA HK). CINDA HK gives full play to its advantages in connecting the international and domestic capital markets, makes use of its experience in investment and financing, financial services, non-performing asset disposal, and focuses on cross-border non-performing asset investment with domestic and overseas linkage characteristics and the acquisition and disposal of non-performing assets by overseas Chinese funded institutions.

CINDA HK provides financial support to corporates through loans, equity investments, mezzanine investments, bond investments, IPOs, and placing additional investments in every stage of corporate growth.


COAMC carries out its overseas business through China Orient Asset Management (International) Holding Limited (COAMCI), a wholly-owned subsidiary of COAMC registered in Hong Kong. COAMCI’s core businesses cover special opportunities for investment and asset management.

COAMCI provides debt and equity instruments, securitization strategies, fund products, and packaged solutions. COAMCI’s asset management business is performed by various funds, such as public debt and equity funds, credit and special opportunities funds, NPLs and distressed investment funds, and onshore healthcare and TMT private equity funds.


Great Wall Pan Asia Holdings Limited (GWPA), the subsidiary of GWAMC in Hong Kong, focuses on developing principal businesses in property investment mostly in Hong Kong.

It should be noted that the above three AMCs are reported to be incorporated into CIC soon. Thereafter, their overseas investment function is expected to be adjusted to suit the existing structure of CIC[10].

ii. Insurance Company (IC)

IC is allowed to invest its funds in overseas financial markets of the countries or regions defined by the regulator and in the following categories of products: currency market, fixed income products, equity, real estate, securities investment fund, private equity fund, and REITs.

The major ICs in China are as follows:

  • The People’s Insurance Company(Group)of China Limited
  • China Life Insurance (Group) Company
  • China Taiping Insurance Group Ltd.
  • Ping An Insurance (Group) Company of China, Ltd.
  • China United Insurance Holding Company
  • Sunshine Insurance Group Company Limited
  • Taikang Insurance Group Inc.
  • DaJia Insurance Group Co., Ltd.
  • Allianz (China) Insurance Holding Company Limited

iii. Financial Leasing Company (FLC)

Based on the report of CLBA[11], there are 68 FLCs in China by the end of March 2023. Most of them are subsidiaries of BFIs. FLCs are allowed to operate finance leasing and leaseback businesses through project companies registered outside China to carry out financial leasing business, such as aircraft, ships, containers, marine engineering structures, engineering machinery, vehicles, and other equipment assets approved by the CBIRC (now the NFRA). The renewables developers, like solar, wind, BESS, off-grid solar, home solar systems, and EV chargers, are flexible to turn to financial leasing solutions if the capital cost can support your economic return.

CLBA’s report shows the top five FLCs as listed below:

  •  Bank of Communications Financial Leasing Co., Ltd.
  • China Development Bank Financial Leasing Co., Ltd.
  • ICBC Financial Leasing Co., Ltd.
  • CMB Financial Leasing Co., Ltd.
  • Minsheng Financial Leasing Co., Ltd.

C. Funds

Various types of available equity funds in China may confuse foreign borrowers and sponsors. The categories defined by Boston University’s China’s Paid-In Capital – Identifying and Analyzing China’s Overseas Development Investment Funds[12] article may help, though there are other types to be discussed below in this article.

a) Sovereign wealth funds (SWF)

There are three SWFs in China, China Investment Corporation (CIC), SAFE Investment Company Limited (SIC), and National Council for Social Security Fund (NCSSF). CIC and NCSSF are controlled by the Ministry of Finance and registered in mainland China. SIC is more mystery company controlled by the State Administration of Foreign Exchange (SAFE) and has its registered office in Hong Kong.

i. CIC

CIC will be the option of the sponsors to approach from an equity and securities perspective. CIC spreads its investment interest in the sectors of real estate, infrastructures (energy transition, storage, data center digital infrastructure, renewables, and public utilities), natural resources, and agriculture. Based on its past annual reports, investments in the EMDCs markets are a minor part of its overseas portfolios due to the risk concern. CIC only has a presence in Hong Kong and New York outside mainland China.


Among the others, NCSSF is responsible for investing and operating the assets directly or through mandates to professional institutions in line with the investment scope and proportion limits approved by the State Council, fulfilling its principal responsibility of ensuring the safety, capital preservation, and appreciation of the funds.

More than half of NCSSF’s overseas investment is carried out through the mandate to the third party, including JP Morgan, European Investors, Lombard Odier, Neuberger Berman, Schroders, Standish, Stone Harbor Investment Partners, AGF, Investec, RBC GAM, AEW and AMP Capital[13].

If the borrower is considering issuing stocks by IPO or project bonds through the special purpose vehicle (SPV), these managers will be your first choice to approach Chinese funds.

NCSSF is also involved in private equity funds which may take equity investment for specific projects. However, the direct equity investment seems only limited to those domestic targets till now.

Mr. Shenggong Pan, the new head of the PBOC, expressed PBOC’s support for the SWFs on their overseas investment in the news press of the second session of the 14th National People’s Congress.

b) Sovereign Development Funds (SDFs)

i. Silk Road Fund (SRF)

SRF was established in Beijing on December 29, 2014, with shareholders of SAFE, CIC, CEXIM, and CDB.

SRF provides investment and financing support for trade and economic cooperation under BRI, to promote shared development and prosperity of the BRI community.

SRF defines itself as a medium- and long-term equity investment fund and is committed to promoting high-quality development of the BRI. Its investments span key BRI regions such as Southeast Asia, South Asia, Central Asia, West Asia, North Africa, and Europe, and a wide spectrum of fields such as infrastructure, energy and resources, industrial cooperation, financial cooperation, and sustainable development.

The borrowers and sponsors with major projects in the above sectors and regions may find a chance to discuss with SRF for equity, debt, or convertible stocks.

ii. China-Africa Development Fund (CAD Fund)

The establishment of the CAD Fund was announced by China at the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) in 2006. As the first equity fund focusing on investment in Africa, CAD Fund was officially launched in June 2007 with headquarters in Beijing and five representative offices in South Africa, Ethiopia, Zambia, Ghana, and Kenya.

The China-Portuguese Speaking Countries Cooperation and Development Fund (CPD Fund) is currently operated by the CAD Fund.

CAD Fund is dedicated to breaking the bottleneck of lack of funds for African countries through equity and quasi-equity investments. It is open to projects in the sectors of mining, infrastructure, agriculture, public utility, and industry in all African continent.

CAD Fund’s appetite may not only invest with minority equity or a small amount of investment but is open to contributing USD100 million or more funds to a single project.

iii. China-LAC Cooperation Fund (CLAC Fund)

CLAC Fund was established by CEXIM on behalf of the Chinese government in 2015. Compared to CAD Fund controlled by CDB, CLAC Fund seems not so active, especially in the past two years, since its website update stopped in 2021.

CLAC Fund has two wings: one is the China Co-financing Fund for Latin America and Caribbean Region, which has an initial input of 2 billion USD by China and is executed by the IDB in financing projects in the LAC region, and the other is a private equity fund (CLAC PE Fund). The CLAC PE Fund is administered by CEXIM and focuses on a diversified range of sectors including but not limited to energy and natural resources, infrastructure, agriculture, manufacturing, high-tech, and information technology. Both greenfield and brownfield projects fall into their screening scope.

iv. China-Africa Fund for Industrial Cooperation (CAFIC) and China-LAC Industrial Cooperation Investment Fund (CLAI Fund)

As a major shareholder, SAFE set up CAFIC with CEXIM and CLAI Fund with CDB. The two funds were combined into Siyuan Investment Co., Ltd. in 2019, which was set up by SAFE itself. So both CAFIC and CLAI Fund now share the same management team at the board level. Both funds serve the BRI projects through flexible instruments such as equity, debt, sub-funds, and loans.

Except for the difference in covering the region, both CAFIC and CLAI Fund are interested in the sectors of mining, renewable energy, oil and gas, infrastructure, manufacturing, and communications. Specifically, CAFIC focuses on the construction of highways, railways, aviation networks, and industrialization in Africa.

v. China-Eurasian Economic Cooperation Fund (CEF)

CEF was founded by CEXIM and the Bank of China with the mission to deepen economic cooperation in the Shanghai Cooperation Organization (SCO) region, advance development along the Silk Road Economic Belt, and raise the level of economic cooperation between China and Eurasian countries. It could transform into an “IFC” under the New Development Bank (NDB).

CEF mainly focuses on priority sectors in Eurasia such as energy, resources and its refinery industries, agricultural development, logistics, infrastructure, next-generation information technology, and manufacturing. CEF’s involvement in the projects can be in the forms of common stock, preferred stock, convertible bond, mezzanine financing, bridge financing and senior bonds, etc. with mid and long-term purposes.

c) Private Equity Fund (PE Fund)

The public offering fund (PO Fund) is limited to investing in overseas secondary markets. The private placement funds enjoy fewer restrictions on their investment inside and outside China. Among those private placement funds, the PE Fund is a proper choice for foreign borrowers and sponsors for equity financing.

Based on the data from the Assets Management Association of China, there are 21151 private placement fund managers by the end of February 2024[14], managing 153288 funds with a total amount of above RMB20 trillion.

Besides the usual ODI models, the PE Fund may also resort to Qualified Domestic Limited Partner (QDLP) and Qualified Domestic Investment Enterprise (QDIE) with more flexibility and simplicity. However, QDLP is restricted to no more than 10 cities or provinces (Beijing, Shanghai, Guangdong, Chongqing, Qingdao, etc.) and QDIE is only applicable in Shenzhen.

Foreign borrowers, sponsors, and their financial advisors need to understand the regulations and the investment scope of PE Funds in China before approaching such funds for equity financing. What should bear in mind is that the PE Fund may not go as long as the SWF and SDF discussed above since they need to exit after 1-3 years.

Foreign fund managers may utilize QDLP to raise funds in China and flow such funds to overseas projects. Therefore, the foreign borrowers and sponsors may also go to their acquainted foreign private fund manager with China connections and business for the possibility of the QDLP model.

d) Other funds with China involvement

You may also find the following funds actively available in BRI regions. If the sponsors are thinking of blended finance, some of the following funds may provide grants, free-interest loans, or concession loans to mitigate the project risks.

  • China-Central and Eastern Europe Investment Cooperation Fund
  • China-ASEAN Investment Cooperation Fund
  • China-EU Co-investment Fund
  • Global Development and South-South Cooperation Assistance Fund (formerly South-South Cooperation Assistance Fund)
  • The China-UN Peace and Development Fund (now the United Nations Peace and Development Trust Fund or UNPDF)
  • UNESCO-China Fund-in-Trust (CFIT)
  • FAO-China Trust Fund
  • China South-South Cooperation Climate Fund
  • The China-World Bank Group Partnership Facility (CWPF)
  • The PRC Poverty Reduction and Regional Cooperation Fund with the Asian Development Bank (formerly PRC Regional Cooperation and Poverty Reduction Fund)
  • Africa Growing Together Fund (AGTF)
  • Belt & Road Green Fund
  • China Co-financing Fund for Latin America and Caribbean Region
  • UAE-China Joint Investment Fund
  • China-ASEAN Maritime Cooperation Fund
  • Sino-French SME fund (SFF SME)
  • Sino-Mex Energy Fund
  • China Insurance Investment Fund (CIIF)
  • Mekong-Lancang Cooperation (MLC) Special Fund
  • China-Kazakhstan Production Capacity Cooperation Fund
  • Russia-China Investment Fund for Regional Development and its sub-funds
  • Belt and Road International Talent Fund (BRITF)
  • China-Russia RMB Fund

We are not exhaustingly listing all the funds in China involved in BRI and China ODI. There are also some other funds set up by the local governments which may focus on specific sectors or regions. PBOC and other government agencies or associations have additional funds or platforms to support Chinese companies “go global”.

D. Multilateral Development Bank (MDB)

Facing difficulties in raising more sayings in the existing MDBs, China combined with other nations in setting up three new MDBs headquartered in China. The new MDBs filled the fund gap among member states and played significant roles in the past few years for the EMDC’s development.

a) New Development Bank (NDB)

Headquartered in Shanghai, NDB was created in 2015 by Brazil, Russia, India, China, and South Africa (BRICS) to mobilize resources for infrastructure and sustainable development projects in the BRICS and other EMDCs. In 2021, the NDB began expanding its membership and admitted Bangladesh, Egypt, the United Arab Emirates, and Uruguay as its new member countries.

NDB supports projects in both public and private sectors through loans, equity investments, and other tailored instruments. NDB’s operations during the 2022-2026 period will focus on, but not be limited to, the areas of clean energy and energy efficiency, transport infrastructure, water and sanitation, environmental protection, social infrastructure, and digital infrastructure.

The visits of the NDB delegation to Egypt and Bangladesh in January 2024 may indicate its targeted market in 2024.

b) Asian Infrastructure Investment Bank (AIIB)

AIIB began operations in 2016 with 57 founding members (37 regional and 20 nonregional). As of February 28, 2024, AIIB has 109 members, including 47 regional, 48 nonregional, and 14 prospective members.

With the mission of financing the Infrastructure for Tomorrow (i4t) – infrastructure with sustainability at its core, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled, and promotes regional connectivity.

AIIB’s operation is divided into two geographical teams:

  • Region 1: Southeast Asia, South Asia (except Pakistan and Afghanistan) and the Pacific Islands.
  • Region 2: Afghanistan, Pakistan, Central Asia, East Asia, West Asia, Europe, Africa, North America and Latin America.

Each regional team has two subdivisions: the Infrastructure Investment Department and the Banking Department. In addition, the Social Infrastructure Department covers both regions and works with both regional teams.

Among the others, AIIB provides the following financing instruments:

  • Sovereign-Backed Financing(SBF

SBF normally has an average maturity of up to 20 years and a final maturity limit of up to 35 years. Sovereign-backed loans are appraised based on a full assessment of the project’s benefits, risks, and borrower implementation capacity. This could be in the form of a loan to, or guaranteed by, an AIIB member.

  • Non-sovereign-Backed Financing

AIIB also provides financing to or for the benefit of a private enterprise or a sub-sovereign entity, such as a political or administrative subdivision of a member or a public sector entity. This type of financing is not backed by a guarantee or counter-guarantee. The terms and conditions of such financings are set on a commercial basis and reflect market conditions and the expected risk the investment poses to AIIB. Loan or guarantee amounts in this type of service can be up to 35 percent of the project and have a final maturity limit of up to 18 years.

  • Equity Investments

AIIB may make direct equity investments in private or public sector companies, either in a new enterprise or an existing enterprise. The investment may take a variety of forms, including subscriptions to ordinary shares and/or preference shares or a loan convertible into equity. AIIB’s investment may not exceed 30 percent of the company’s shareholdings, and in any event, be a minority investor and not seek a controlling interest in the target entity or enterprise.

  • Special Fund for Project Preparation

AIIB has a Project Preparation Special Fund that provides grants for preparing projects. The purpose of the Special Fund is to support and facilitate preparatory activities during the preparation and early implementation of projects to be financed by AIIB from its ordinary and/or special resources.

c) Multilateral Cooperation Center for Development Finance (MCDF)

Established in 2020, MCDF is a multilateral financial mechanism designed to promote high-quality infrastructure and connectivity investments in developing countries through partnerships. MCDF and its partners are committed to adopting International Financial Institution (IFI) standards in the projects, such as debt sustainability, environmental and social standards, non-fossil fuel and clean energy investments, anti-corruption and fraud, procurement, transparency, and information disclosure. MCDF will support developing countries, IFIs, and new partners in addressing quality and sustainability challenges impacting cross-border infrastructure and connectivity within the scope of their efforts to implement the G20 Quality Infrastructure Principles.

In line with the G20 Eminent Persons Group recommendations, MCDF will leverage the potential for closer collaboration among MDBs and other partners.

As a multilateral finance facility, MCDF will complement rather than compete with other mechanisms sharing our vision to support the implementation of the G20 Quality Infrastructure Principles, the Sustainable Development Goals (SDGs), and the Paris Climate Agreement.

MCDF provides grants and technical assistance to developing countries and partners. MCDF grants must be requested by, and channeled through, Implementing Partners, which are IFIs accredited by MCDF. MCDF’s activities are developed by, and implemented through, its Collaboration Platform and Finance Facility.

MCDF’s current Implementing Partners include AIIB, the African Development Bank (AfDB), the Development Bank of Latin America and the Caribbean (CAF), and the African Finance Corporation (AFC).

You can find the most recent grants by MCDF to the projects in Latin America[15], Africa,[16] and ASEAN[17] regions, approved by its governing committee on March 26, 2024.

E. Companies

Some companies in China including state-owned enterprises (SOE) and private-owned enterprises (POE) are more appropriate as an equity investor though they may have various purposes and procedures for their equity involvement.

a) SOEs

Based on the data on the State-owned Assets Supervision and Administration Commission (SASAC) website[18], China has 97 SOEs at the national level (National SOEs) and is administered by the SASAC spreading in the pillar industries in the Chinese economy.

  • China National Nuclear Corporation (CNNC)
  • China Aerospace Science and Industry Corporation Limited (CASIC)
  • China Aerospace Science and Technology Corporation
  • Aviation Industry Corporation of China, Ltd. (AVIC)
  • China State Shipbuilding Corporation Limited
  • China North Industries Group Corporation Limited
  • China South Industries Group Co., Ltd.
  • China Electronic Technology Group Corporation
  • Aero Engine Corporation of China
  • China Rongtong Asset Management Group Corporation Limited (CRTC)
  • China National Petroleum Corporation (CNPC)
  • China Petrochemical Corporation (Sinopec)
  • China National Offshore Oil Corporation (CNOOC)
  • China Oil & Gas Pipeline Network Corporation (PipeChina)
  • State Grid Corporation of China (State Grid)
  • China Southern Power Grid Co., Ltd. (CSG)
  • China Datang Corporation Ltd.(CDT)
  • China Huaneng Group Co., Ltd.(CHNG)
  • China Huadian Corporation Ltd.(CHD)
  • State Power Investment Corporation Limited (SPIC)
  • China Three Gorges Corporation (CTG)
  • China Energy Investment Corporation (CHN Energy)
  • China Telecom Corporation Limited
  • China United Network Communications Group Co., Ltd.
  • China Mobile Communications Group Co., Ltd.
  • China Satellite Network Group Co., Ltd.
  • China Electronics Corporation (CEC)
  • China FAW Group Co., Ltd. (FAW)
  • Dongfeng Motor Corporation
  • China First Heavy Industries Co., Ltd. (CFHI)
  • China National Machinery Industry Corporation (Sinomach)
  • Harbin Electric Corporation (HE)
  • Dongfang Electric Corporation (DEC)
  • Ansteel Group Corporation Limited
  • China Baowu Steel Group Corporation Limited (Baowu)
  • China Mineral Resources Group Co., Ltd.
  • Aluminum Corporation of China (Chinalco)
  • China COSCO SHIPPING Corporation Limited (COSCO SHIPPING)
  • China National Aviation Holding Corporation Limited (AirChina)
  • China Eastern Air Holding Co., Ltd. (China Eastern)
  • China Southern Airlines Company Limited
  • Sinochem Holdings Corporation Ltd. (Sinochem)
  • COFCO Corporation
  • China Minmetals Corporation (China Minmetals)
  • China General Technology (Group) Holding Co, Ltd. (Genertec)
  • China State Construction Engineering Corporation (CSCEC)
  • China Grain Reserves Group Ltd. Company
  • China South-to-North Water Diversion Corporation Limited
  • State Development and Investment Group Co., Ltd. (SDIC)
  • China Merchants Group (CMG)
  • China Resources (Holdings) Co., Ltd. (CR)
  • China Tourism Group Corporation Limited (CTG)
  • Commercial Aircraft Corporation of China, Ltd. (COMAC)
  • China Energy Conservation and Environmental Protection Group (CECEP)
  • China International Engineering Consulting Corporation (CIECC)
  • China Chengtong Holdings Group Ltd.
  • China National Coal Group Corporation
  • China Coal Technology & Engineering Group
  • China Academy of Machinery Science and Technology (Group) Co., Ltd. (CAM)
  • China Iron & Steel Research Institute Group Co., Ltd. (CISRI)
  • China National Chemical Engineering Group Corporation Ltd. (CNCEC)
  • China National Salt Industry Group Co., Ltd.
  • China National Building Material Group Co., Ltd.(CNBM)
  • China Nonferrous Metal Mining (Group) Co., Ltd.(CNMC)
  • China Rare Earth Group Co., Ltd. (REGCC)
  • GRINM Group Corporation Limited (GRINM)
  • BGRIMM Technology Group (BGRIMM)
  • China International Intellectech Group Co., Ltd.(CIIC)
  • China Academy of Building Research (CABR)
  • CRRC Corporation Limited (CRRC)
  • China Railway Signal & Communication Corporation Limited(CRSC)
  • China Railway Group Limited (CREC)
  • China Railway Construction Corporation Limited (CRCC)
  • China Communications Construction Company Limited (CCCC)
  • China Information and Communication Technologies Group Corporation (CICT)
  • China National Agricultural Development Group Co., Ltd.(CNADC)
  • China Forestry Group Corporation (CFGC)
  • China National Pharmaceutical Group Co., Ltd. (Sinopharm)
  • China Poly Group Corporation Limited (Poly)
  • China Construction Technology Consulting Co., Ltd.(CCTC)
  • China Metallurgical Geology Bureau
  • China National Administration of Coal Geology
  • Xinxing Cathay International Group (XXIG)
  • China TravelSky Holding Company Limited (TravelSky)
  • China National Aviation Fuel Group Limited (CNAF)
  • China Aviation Supplies Holding Company (CAS)
  • Power Construction Corporation of China (Power China)
  • China Energy Engineering Group Co., Ltd. (Energy China)
  • China Anneng Construction Group Corporation Limited
  • China National Gold Group Co., Ltd. (China Gold)
  • China General Nuclear Power Corporation (CGN)
  • Overseas Chinese Town Holdings Company (OCT Group)
  • Nam Kwong (Group) Company Limited
  • China Electrical Equipment Group Co., Ltd. (CEE)
  • China Logistics Group Co., Ltd.
  • China Reform Holdings Corporation Ltd
  • China Certification & Inspection Group

Due to the requirement by SASAC that the SOEs must focus on their core business, the sponsors need to select the ones in the above list whose core business covers the sectors of the project seeking equity funds from these SOEs.

The Chinese government is reforming the investment and operation of its SOEs. SDIC, CR, CMG, CNBM, and Baowu have been defined as investment companies. COFCO, China Minmetals, SPIC, CCCC, Chinalco, COSCO SHIPPING, Sinomach, Genertec, Poly, AVIC, CHN Energy and CGN are still in the transformation process. Therefore, the main business and function of such SOEs will be equity investment in their focused sectors.

Besides the SOEs listed above, there are many SOEs controlled by the local SASAC at local government levels. Although such local SOEs may not have the financial capability as those National SOEs, they may have more flexibility and short approval procedures for decision-making.

b) POEs

The 2022 statistics[19] by the MOC show the ODI of 9835 POEs in China accounted for 33.6% of the total non-financial ODI that year which were the largest and most active groups in China’s ODI flows.

These POEs may have different appetites in ODI regions and sectors. Mining, manufacturing and wholesale and retail may be the targeted sectors for most of the POEs. Although POEs prefer investing in developed countries due to detesting risks, they are open to and welcome mining projects in Africa, Latin America, and Asia. The EV-related metals pushed those battery POEs listed in China stock exchanges to find cobalt, nickel, and lithium around the world in the past few years. We noted that the enthusiasm has been declining with the price slide of those commodities and the possible innovation of alternative technical solutions.

Geographically, such POEs mostly are located in the eastern coastal areas with developed economies.

c) Engineering Procurement Construction Company (EPC Companies)

EPC Companies may be the Chinese entity that the borrower or the sponsor first and originally contacts since they often have business development staff in the project host country looking for EPC opportunities.

However, not all EPC Companies are capable and qualified to be the contractor of the proposed project. They must comply with the qualification requirements under PRC laws and regulations and included in the list maintained by MOC. The foreign borrowers and sponsors need to do basic KYC before substantial discussion and information presentation with the EPC Companies.

In terms of the equity investment in the projects seeking funds from EPC Companies, please bear in mind that they are only allowed to invest no more than 15% of the total amount of the EPC contract. The less to invest, the easier to be approved by the NDRC at the national or local level.

F. Conclusion

It is complicated for foreign borrowers, sponsors, and financial advisors to work with CFIs, funds, MDBs, and Chinese companies to finance their projects located outside China. After precisely defining the feasibility of your project, the following are recommended to implement their financing effort:

  • Selecting the right fund sources from China requires understanding who is available for your equity investor or debt lenders.
  • Familiar with their focused sectors, regions, qualifications, and application process.
  • Be aware of their available instruments and ability to lead (if required).
  • Be advised on the regulations under China law related to such outbound equity investment and lending.

This article only touches on the first step. We are going to solve the rest in our following series of articles.

Should you have any questions, please feel free to reach Edwin Li, partner of Dacheng Law Offices, LLP (Dentons’ preferred law firm in China), at





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