Members of a multilateral financial cooperative will ink six deals valued at US$741.5 million during a Shanghai summit meeting, as part of efforts to fuel economic cooperation, the consortium chairman said yesterday.
Members of the Banks Consortium, under the Shanghai Cooperation Organization (SCO), will sign up for six projects which include a US$200 million hydropower plant in Kazakhstan and a US$500 million financing agreement between China and Russia.
"We will attach more attention to the co-operation on hydropower," Chen Yuan, governor of China Development Bank (CDB), told China Daily in a sideline interview at the consortium's second council meeting. "Other key areas include energy, power, transportation and telecommunications."
Established in October 2005, the SCO Banks Consortium is committed to provide diversified financing services to facilitate regional economic cooperation.
The consortium consists of six member banks from China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. And CDB, a Chinese policy lender specializing in infrastructure financing, is the first host bank for the consortium council.
The SCO Banks Consortium has worked on several large infrastructure projects and financial co-operation deals.
"If finance is compared with blood, the Banks Consortium is the heart, transferring blood to ensure the smooth functioning of different organs to achieve a free flow of commodities, capital, technology and services within 20 years, a goal proposed by the SCO in 2003," said A Djumabaev, deputy secretary-general of the Banks Consortium.
The Banks Consortium is currently working on a projects pool and credit quota system through which key projects will receive stronger financial support.
China and other SCO members decided on 127 joint projects and set up seven specialist panels to study and oversee cooperation in areas including quality inspection, customs, electronic commerce, investment promotion, transportation, energy and telecommunications.
"And we will embark on two to three pilot projects to show how the preferred projects could be financed through market operations," Chen Yuan added.
CDB is also planning to set up further staff training and information-sharing initiatives.
"We are thinking about setting up a Banks Consortium website to provide a platform to exchange information and experience among member banks," said Chen. "Besides, CDB plans to give one or two training courses this year to share our experience with member banks."
The six member banks will also sign up to three framework guidelines today.
"We have found some interesting cooperation projects from the consortium," said V. Dmitriyev, president of the Russian Vnesheconombank. "And we hope that more banks can join us in the near future, which can further foster the multilateral economic and trade development in the region."
The member states of SCO cover an area of over 30 million square kilometres, or about three-fifths of Eurasia, with a population of 1.455 billion, about a quarter of the world's total.
With a registered capital of US$3 billion, Vnesheconombank is the host bank of the SCO Bank Consortium Council for the next year starting October 26. Dmitriyev will be the chairman.
(China Daily June 15, 2006)