SINGAPORE becomes the first country in south east Asia to sign up to a major OBOR Project
More funds will be made available to support Singapore and Chinese companies in One Belt & One Road (OBOR) infrastructure projects, this was announced after a recent Memorandum of Understanding (MOU) signed between International Enterprise (IE) Singapore and the China Construction Bank (CCB).
The One Belt One Road projects will connect China with people from Europe, Africa and Asia economically, socially and culturally through the continental Silk Road Economic Belt and the 21st Century Maritime Silk Road.
Under the MOU, which is the first the bank has signed with a Southeast Asian country, CCB will provide S$30 billion of financing services to support local and Chinese companies to invest in OBOR projects through Singapore.
Singapore companies will also be able to tap the bank's network in 25 countries and regions. The bank has 176 major projects in OBOR countries, with an aggregate investment size of more than US$300 billion (S$405 billion) covering sectors such as power generation, mining and transportation.
IE Singapore's CEO Lee Ark Boon said that as the regional infrastructure hub, Singapore's know-how and networks with China and Southeast Asia give Singapore-based companies an advantage in OBOR projects.
He added that the partnership with the bank is "strategic, strengthening the critical financing element and bringing more projects to fruition".
Speaking at the "One Belt, One Road" Infrastructure and Capital Market Financial Services Forum, Singapore's Minister in the Prime Minister's Office Chan Chun Sing noted that outward investments from China are overtaking foreign direct investments into China.
With much infrastructure required in Southeast Asia, Mr Chan said there is "tremendous potential" to direct part of the outward direct investment into the region.
He added that Singapore's deep and in-depth market knowledge of Southeast Asia, ability to work long term with the certainty the rule of law provides, and ability to provide a range of ancillary services such as professional and legal services will help the Republic work with China in investing in infrastructure projects in Southeast Asia.
CCB is exploring setting up a centre in Singapore to provide project financing and related professional services required in OBOR basic infrastructure investments.
It has also signed an MOU with the Singapore Exchange (SGX) to develop the capital market in Singapore. Under this agreement, the bank will work with SGX to encourage more Chinese companies to list in Singapore, especially through SGX's Direct Listing Framework.
The local bourse operator will work with the bank to highlight opportunities for Chinese companies to issue offshore renminbi bonds, or Lion City Bonds, undertake merger and acquisitions and other capital market activities in Singapore. There are currently 120 Chinese companies and 103 renminbi bonds listed on the SGX.
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