During the 2nd Belt and Road Forum for International Cooperation in May 2017, Chinese President Xi Jinping announced that the China Development Bank (CDB) will provide special loans of 250 billion RMB to support BRI-related infrastructure, production capacity and financial cooperation. The special loans consist of three sub-loans, namely a special loan of 100 billion RMB for BRI infrastructure, a special BRI loan of 100 billion RMB for production capacity cooperation and a special BRI loan of 50 billion RMB for financial cooperation.

By the end of 2017, CDB had obtained accumulated assets of nearly 16 trillion RMB and a balance of loans issued exceeding 11 trillion RMB on a global scale.[1] It had formed a business development framework of “one body, two wings”, in which projects in infrastructure, basic industries, pillar industries and strategic emerging industries are the “main body” while promoting coordinated regional development and urbanization and serving Chinese enterprises in going-global are the “wings”.[2] 

Figure 1: Asset scale and loan balance of the CDB in 1 billion RMB (Source: CDB, 2017 Annual Report of the China Development Bank)

Among them, the CDB had issued loans of more than 180 billion USD to BRI countries, with the balance of loans exceeding 110 billion USD, accounting for more than 30% of the bank’s international business.[3] In 2017 alone, the CDB spent 17.6 billion USD in loans to BRI countries for projects covering cooperation in infrastructure, telecommunications, production capacity, financial cooperation and overseas industrial parks.[4]

Figure 2: The CDB’s figures for BRI-related loans (as of end of 2017)

In addition to traditional international loans, the financing mode usually adopted by the CDB in BRI clean energy cooperation also includes direct investments through its CDB Capital and the CDB Development Fund.

Supporting BRI clean energy cooperation with international loans

In terms of international loans, the financial services of the CDB mainly include provision of medium- and long-term loans with a term of more than 1 year for energy projects and companies, provision of working capital loans with a term of 1 year or less and provision of short-term foreign exchange loans for construction projects. There are also some other services, such as medium- and long-term foreign exchange project loans, foreign exchange working capital loans, foreign exchange asset financing, overseas RMB project loans, international syndicated loans, export buyer’s credit and export seller’s credit. The loans are normally denominated in USD, EUR or RMB.

Figure 3: Selected international financing models of the China Development Bank (CDB) 

Medium- and long-term foreign exchange project loans

Providing medium- and long-term foreign exchange project loans is the most common way adopted by the CDB to finance energy projects in BRI countries. Such loans have a maturity of more than one year with expected cash flow from assets generated by the loans as the main source of repayment. They are designed to support the “going-global” and “bringing-in” strategies of large Chinese enterprises with strong domestic strength, support overseas financial institutions or governments to carry out development financial cooperation business, and enhance the stability of political and economic development of counterpart countries as well as of the trade development between China and counterpart countries.[5] For example, in September 2013, China National Petroleum Corporation (CNPC) signed two cooperation with Turkmengas State Konzern, which are respectively an EPC (engineering, procurement and construction)/turnkey contract for the construction of the Garjinesh gas field in Turkmenistan with commercial gas production capacity of 30 billion m3 per year and a PSA (purchase & sales agreement) for additional natural gas provision of 25 billion m3 per year. To ensure the successful completion of these projects, the CDB and Turkmengas State Konzern signed a cooperation agreement for project financing of medium- and long-term foreign exchange loans.[6]

Syndicated loans

During the construction of BRI energy projects, as some of the projects involve high risks and large investments, the CDB also provides syndicated loans to diversify the credit risk of banks. An international syndicated loan is issued by two or more financial institutions to the borrower to provide funds for international projects. It is characterized by the use of international financial market resources, large loan amount and several participating parties. The use of international syndicated loans could optimize asset structures and reduce the concentration of loan, which makes them suitable for supporting domestic and foreign customers with options of large project financing, trade financing and a variety of huge working capital financing.[7] For example, the photovoltaic power station project of the Jinnah Photovoltaic Industrial Park in Bahawalpur, Punjab province, Pakistan, financed and constructed by ZTE Energy, covers an area of 4500 acres with a total scale of 900 MW. The first 300 MW-phase of the project was officially connected to the grid in June 2016 and is estimated to generate 480 million KWh annually. Once wholly completed, the project will be ranked as the world’s largest photovoltaic power generation project, providing 1.3 billion KWh of clean energy per year. With a total investment of nearly 1.5 billion USD, the project is financed by syndicated loans from the CDB, the China EXIM Bank, the Bank of Jiangsu and the Bohai Bank.[8]

Export buyer’s credit/export seller’s credit

Apart from the medium- and long-term foreign exchange project loan and the international syndicated loan mentioned above, the CDB also in many cases adopts export buyer’s credit and export seller’s credit, which are relatively mature ways of financing in BRI energy cooperation.

Figure 4: Export buyer’s credit

Figure 5: Export seller’s credit

Investing in BRI clean energy through CBD Capital and CDB International Investment Limited

China Development Bank Capital Co.,Ltd. (CDB Capital) is a wholly owned subsidiary of China Development Bank (CDB) and was ounded in August 2009 with the approval of the State Council. With a registered capital of RMB 60.6 billion, CDB Capital is principally engaged in investment and asset management. By the end of 2017, CDB Capital’s total assets added up to RMB 136.2 billion, with nearly RMB 280 billion in assets under management and a cumulative investment of RMB 268 billion in 580 projects.[9]

CGN Group has been playing an active role in BRI exploration of renewable energy. For example, it entered into an equity purchase agreement with a power project company of the Malaysian Edla Global Energy for corporate shares and the right for undertaking new projects in November 2015, and undertook 13 clean energy power projects in five BRI countries, namely Malaysia, Egypt, Bangladesh, UAE and Pakistan. In December 2017, CDB Capital was the largest cornerstone investor with share subscription when China General Nuclear Power co. LTD (CGN) – a subsidiary of China General Nuclear Power Group, listed on the Hong Kong Stock Exchange, raising more than 3.1 billion USD, and became the first public-listing company in the world for pure nuclear power generation.[10]

In addition, CDB Capital also participated in BRI clean energy cooperation projects through its subsidiary CDB International Investment Limited. For instance, CDB International Investment Limited holds 23.81% of the issued share capital of Bihua Venture Capital, while the latter directly owns about 16.29% of Jinko Power. At the same time, it is worth mentioning that the Sweihan 1177 MW Photovoltaic Power Generation Project jointly supported by Jinko Power, Abu Dhabi Water and Electricity Authority and Marubeni with funds and technology is the largest cooperation projects of renewable energy between China and UAE.[12]

Investing in BRI clean energy through CDB Capital’s funds

CDB Capital has been participating in investments in BRI clean energy projects through bilateral and multilateral funding. To date, it has invested and managed 18 multilateral funds and committed to the public with an investment amount of over 70 billion RMB.[13] Among them, BRI-related funds include the Silk Road Fund, the China-Africa Development Fund, the China-UAE Investment Cooperation Fund and the China-Latin Energy Cooperate Investment Fund.

Figure 1: BRI-related funds with participation of CDB Capital

Name Time of Establishment Major parties Scale Energy projects
Silk Road Fund [14] Nov 2014 State Administration of Foreign Exchange SAFE, China Investment Corporation CIC, CDB Capital, China Exim Bank 40 billion USD Karot Hydropower Project in Pakistan, Yamal LNG Project in Russia, Hassyan Clean Coal Project in Dubai UAE
China-Africa Development Fund [15] June 2007 CDB Capital, Phoenix Tree Capital Partners 5 billion USD Ansuo 200 MW Power Plant Project in Ansuo city, Ghana
UAE-China Joint Investment Cooperation Fund [16] Dec 2015 CDB Capital, China’s State Administration of Foreign Exchange, Mubadala Investment Company 10 billion USD Mainly investing in clean energy projects
China-LAC Industrial Cooperation Investment Fund [17] Aug 2015 CDB Capital, China’s State Administration of Foreign Exchange, Mubadala Investment Company 30 billion USD China Three Gorges Corporation’s 30-year concession to operate two hydroelectric power stations in Elia and Giubia, Brazil

References (in Chinese)

[1] CDB: CDB 2017 Annual Report, Sept 2018, http://www.cdb.com.cn/gykh/ndbg_jx/2017_jx/.

[2] CDB: Brochure of CDB’s international Business, http://www.cdb.com.cn/ywgl/xdyw/gjhzyw/201512/W020160311572457861502.zip.

[3] CDB: Publicity materials compilation of CDB’s financial knowledge2018, Aug 2018.

[4] CDB: CDB 2017 Annual Report, Sept 2018, http://www.cdb.com.cn/gykh/ndbg_jx/2017_jx/.

[5] CDB, Medium- and Long-Term Foreign Exchange Project Loans, 23 Feb 2016, http://www.cdb.com.cn/cpfw/gjyw/dkrz_434/201602/t20160219_2633.html.

[6] “China and Turkmenistan signed an agreement to supply 25 billion m3 natural gas annually”, China Economic Net, 5 Sept 2013, http://intl.ce.cn/sjjj/qy/201309/05/t20130905_1355447.shtml.

[7] CDB, International Syndicated Loans, 19 Feb 2016, http://www.cdb.com.cn/cpfw/gjyw/dkrz_434/201602/t20160219_2639.html.

[8] ZTE Energy’s Pakistan 900 MW Photovoltaic Power Station – the Largest Power Generation System in the World – Phase I Connected to Grid and Started to Generate Electricity, ZTE Energy, 10 June 2016, http://www.zonergy.com/news_detail/newsId=129.html.

[9] CDB Capital, Company Profile, http://www.cdb-capital.com/GKJR/company/list.

[10]CDB Capital, Overseas Investments – China General Nuclear Power co. LTD, http://www.cdb-capital.com/GKJR/overseas/17090817293511?pidx=0.

[11] “The Eight ‘Best’ in Going-Global: CGN Performed the Best in the BRI”, Caijing.com.cn,13 Dec 2017, http://www.caijing.com.cn/20171213/4376830.shtml.

[12] “Jinko Energy Won the Bid for the World’s Largest Single Photovoltaic Project, Sina Finance, 25 Feb 2017, http://finance.sina.com.cn/roll/2017-05-25/doc-ifyfqvmh8924272.shtml.

[13] CDB Capital, Fund Management, http://www.cdb-capital.com/GKJR/fund/list.

[14] CDB Capital, Fund Management – Silk Road Fund, http://www.cdb-capital.com/GKJR/funprojectcase/17092109014611?pidx=0.

[15] CDB Capital, Fund Management – China-Africa Development Fund, http://www.cadfund.com/NewsInfo.aspx?NId=10.

[16] CDB Capital, Fund Management – UAE-China Joint Investment Cooperation Fund, http://www.cdb-capital.com/GKJR/funprojectcase/17092109003211?pidx=0.

[17] CDB Capital, Fund Management – China-LAC Industrial Cooperation Investment Fund, http://www.cdb-capital.com/GKJR/funprojectcase/17092109011011?pidx=0.

About the author(s)


Hongfeng Xu is the assistant director general and a Research Fellow at the International Institute of Green Finance (IIGF), CUFE. She is a Harvard University Rajawali Visiting Fellow and a Ford Foundation International Fellow. She obtained her Ph.D. from Tsinghua University at the Chinese Academy of Social Sciences. Her research mainly focuses on energy economy and energy geographical relationship. She is the director of several national research projects at China’s National Social Sciences Foundation, as well as China’s Science and Technology Funds for the Excellent Overseas Fellow.


Jin Wang is a graduate student at the Graduate School of the Chinese Academy of Social Sciences.


Jianing Pang is a research assistant at the International Institute of Green Finance (IIGF), CUFE

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