Agreements Enable Long-term Financing
for Development Projects in China
Beijing, China, November 23, 2011—IFC,
a member of the World Bank Group, has entered into agreements with China
Development Bank and the Export-Import Bank of China that will enable it
to extend long-term Chinese renminbi loans, supporting projects that improve
access to finance in rural areas, education, and health care for millions
By signing the National Association
of Financial Markets Institutional Investors’ Master Swap Legal Agreements
with the two banks, IFC becomes the first multilateral institution authorized
to conduct transactions with Chinese financial institutions in the domestic
local-currency swap market.
“Through this partnership with CDB
and China Eximbank, IFC now adds an additional tool that enables us to
extend long-term renminbi financing. This not only broadens the way we
can fund projects but also strengthens our commitment to participating
in the opening up of the China’s domestic capital markets,” said Jingdong
Hua, IFC Vice President and Treasurer, who signed the agreements in Beijing.
IFC uses local-currency financing to
help clients mitigate foreign-exchange risk and to develop local capital
markets. It makes local-currency loans through the use of derivatives,
issuing bonds in local currency, and through structured finance products
such as partial credit guarantees and risk-sharing facilities. In partnership
with international and domestic banks, IFC has committed over $7.4 billion
in local-currency financing in more than 40 currencies.
“This initiative is another milestone
for the IFC-China partnership,” said Sérgio Pimenta, Director for East
Asia and the Pacific, IFC. “With our partner banks in China, it enables
us to support key projects that are important to the country’s sustainable
development.” Earlier this year, CDB and China Eximbank became the
first Chinese banks to participate in an IFC syndicated parallel loan for
a project in Africa.
In East Asia, IFC has used local swap
markets to provide loans to private sector companies in Indonesia, the
Philippines, Thailand, and Vietnam.
IFC, a member of the World Bank Group,
is the largest global development institution focused exclusively on the
private sector. We help developing countries achieve sustainable growth
by financing investment, providing advisory services to businesses and
governments, and mobilizing capital in the international financial markets.
In fiscal 2011, amid economic uncertainty across the globe, we helped our
clients create jobs, strengthen environmental performance, and contribute
to their local communities—all while driving our investments to an all-time
high of nearly $19 billion. For more information, visit www.ifc.org.