Belt and Road loans meet intl standards: policy bank

Dated 2018-07-04, tagged under General

Belt and Road loans meet intl standards: policy bank-OBOR Invest

 2018-06-29 09:38:08 Source: Global Times

Almost all of the projects along the Belt and Road Initiative routes financed by the China Development Bank (CDB) have generated sustainable cash flow and repay their loans plus interest in a normal way, the Chinese lender told the Global Times.

Faced with rising concerns over a so-called B&R debt trap, CDB, a major lender for B&R projects, said it considers the projects' ability to self-liquidate to be important. Cash flow generated by the projects themselves will be a source of repayment for loans, so there has been no extra financial burden on countries involved for those projects, CDB said.

The Washington-based Center for Global Development said in a report released in March that there are concerns that the $8-trillion-dollar B&R Initiative could leave countries with debt problems that would create a degree of dependence on China as a creditor.

"It's biased to say that loans for B&R projects have generated more debt for countries, and the bank operates in accordance with international conventions and market rules," the bank said. "We stick to projects that could bring economic benefits and are economically feasible."

CDB also set up a special lending scheme worth 250 billion yuan ($36.7 billion) in mid-May 2017 to support B&R cooperation on infrastructure, industrial capacity and financing, the Xinhua News Agency reported in June 2017.

CDB has strict requirements about the financial positions and sovereign credit ratings of cooperating countries, and has strict restrictions on the credit lines and loan concentration of these countries, the bank noted.

"For some heavily indebted less-developed countries, loans limits and requirements are in line with the IMF," the country's largest policy bank noted.

Share this post?
Obor Invest social share link