Hong Kong’s One Belt, One Road infrastructure financing credentials get a boost

PUBLISHED : Wednesday, 26 October, 2016, 9:26pm
UPDATED : Wednesday, 26 October, 2016, 9:26pm

Hong Kong’s goal of becoming an infrastructure financing centre for China’s One Belt One Road initiative got a boost on Wednesday, with more than a dozen new firms joining the Infrastructure Financing Facilitation Office (IFFO).

IFFO, established in July by the Hong Kong Monetary Authority (HKMA) to facilitate infrastructure investments and their financing, said 13 more organisations joined its ranks, including top players such as AIA Group, Citi Group and Mizuho Bank.

The announcement was made at the first executive workshop organised by HKMA and International Finance Corporation (IFC), a member of the World Bank Group. The two parties signed a Memorandum of Understanding in July this year to promote an efficient and conducive market environment for infrastructure financing.

A growing number of companies have been looking into investments in infrastructure and related projects after the Chinese government introduced the One Belt One Road initiative, a strategy to promote connectivity and long-term development in regions spanning from Asia African to Europe.

“Hong Kong could become a springboard for many Chinese companies expanding overseas and similarly, an attractive destination for overseas corporations wanting to gain a foothold in the mainland market,” said Vincent Lee, executive director of HKMA.

According to data supplied by HKMA, 62 per cent of China’s outward direct investments and 64 per cent of foreign direct investments into mainland China in 2015 were made through Hong Kong.

“IFFO does not make investments directly, instead it provides a platform to bring in partners from the insurance, banking and legal sectors, as well as international business councils and corporations,” said Lee, who also serves as deputy director of IFFO.

“Hong Kong has many unique advantages to make itself an infrastructure financing centre,” he said. “Hong Kong’s role as the premier offshore RMB business centre and regional transportation hub, with sufficient talent and expertise, all contributes to the city playing a crucial rule in this respect.”

He added that the city has “a strong relationship with major players in infrastructure investment and their financing, whose engagement is crucial”.