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China launches $28 billion PPP fund

China's Ministry of Finance has announced a public private partnership (PPP) fund worth 180 billion yuan ($28 billion) with 10 shareholders at launch, Investor Infrastructure has reported.23 Mar 2016

The fund aims to boost the country's PPP programme. It will mainly make equity investments, aiming to lower financing costs in Chinese PPP projects, Investor Infrastructure said.

Shareholders include the Industrial and Commercial Bank of China, China Construction Bank (CCB), Postal Savings Bank ofChina (PSBC), Bank of China, China Life Insurance, CITIC Group and the National Council for Social Security Fund, Investor Infrastructure said.

CCB and PSBC will each contribute an initial 30bn yuan to the fund while the other stakeholders will each contribute 5 to15bn yuan, the news site said.

The management team of the fund will be based in the Ministry of Finance offices at the Central University of Finance and Economics Science Park in Beijing, and will be led by Zhou Chengyue who is currently an inspector within the ministry's finance department.

Beijing-based Helena Chen, an infrastructure expert at Pinsent Masons, the law firm behind Out-Law.com, said: "The establishment of the fund demonstrates the Chinese government’s strong support for PPP projects in China. However, the creditors and fund providers in PPP projects may face certain risks arising from incomplete legal frameworks and some mutually contradictorily laws and regulations. The establishment of the fund may enhance the cry for legal reform in PPP related laws."

Recent Infrastructure Experience