1. Home
  2. CHINA
  3. China conducts securitization of PPP projects

China conducts securitization of PPP projects

China conducts securitization of PPP projects

Chinese regulators have approved several infrastructure projects funded by public-private partnerships (PPP) to raise funds through securitization, a move that aims to attract private investment to such projects.

The country’s stock exchanges have reviewed applications from the first group of nine PPP-funded infrastructure projects that intend to issue securities, and have given the green light to some of them, according to a recent statement from the China Securities Regulatory Commission (CSRC).

The approved projects include a tunnel construction project that will raise 1.2 billion yuan (174 million U.S. dollars) and a heating project to raise 700 million yuan, said the Shanghai Stock Exchange in a statement.

The Chinese government has encouraged the adoption of PPP, a collaborative investment model between government and private companies, in infrastructure projects amid concerns over heavy local government debt.

Authorities began to allow asset-backed securitization for PPP-funded infrastructure projects in December 2016, exploring a new way of tapping private funds for those projects.

The securitization of PPP-funded projects can help expand funding channels, lower financing costs and better attract private capital, the CSRC said.

By the end of 2016, a total of 11,260 PPP-funded projects were registered, 1,351 projects of which were signed with a combined investment of 2.2 trillion yuan, according to the China Public Private Partnerships Center under the Ministry of Finance.
SOURCE: Xinhua



Enquiries at EnterpriseTV.my@gmail.com