LONDON, Feb 1 (IFR) - Standard Chartered has signed an agreement with China Development Bank allowing the state-owned institution to provide up to Rmb10bn (US$1.59bn) to the London-listed bank for projects under China’s flagship Belt & Road initiative.
The memorandum of understanding, covering the next five years, was signed during a meeting between UK prime minister Theresa May and Chinese premier Li Keqiang.
Standard Chartered has been keen to finance these projects. In December it outlined plans to extend a further US$20bn to these initiatives over the next three years. It contributed to 50 projects under the scheme in 2017.
The UK bank said it would use the facility “to support loans that will fund corporate finance projects and trade finance transactions” in the 45 countries covered by the Belt & Road plan in which it operates.
“Standard Chartered will make the drawdown decisions, and take the credit risk of the borrowers,” said the statement.
Overall CDB has earmarked Rmb250bn (US$40bn) for Belt & Road projects between 2017 and 2019.
StanChart chief executive Bill Winters said: “This MoU brings us closer together, and offers more flexibility of funding, especially renminbi funding, to support projects along the Belt & Road initiative routes.”
StanChart is not the first non-Chinese bank to support the initiative formally. Last June CDB also signed a similar agreement with Deutsche Bank to provide financing for US$3bn of projects. (Reporting by Christopher Spink)