Leaders of banks and investment firms called for innovative financing mechanisms for the China-proposed "One Belt, One Road" (B&R) initiative during the Silk Road Forum, which ran from Monday to Tuesday in Warsaw.
There is a huge gap between the funding demand and the need for infrastructure, which requires the participation of different parties including the government, multilateral development banks, investment institutions and private funds, Ding Xuedong, chairman and CEO of China Investment Corp, told a session of the forum on Tuesday.
"Progressive development is a feasible way, which involves selling profitable [infrastructure] projects in order to invest in new ones," Ding noted.
It is extremely important that thorough preparations are made for infrastructure projects, which should follow investment standards while fully taking into account different investment climates, Natalie Khanjenkova, managing director of Turkey and Central Asia of the European Bank for Reconstruction and Development, told the Global Times after the session.
"I think a very important challenge for all of us collectively is to find a way to bring in more private-sector investment," she said, noting that it is critical to introduce private partners due to the huge need.
There is a lot of money looking to invest in infrastructure projects under the B&R initiative, "but the problem is not the money, it is how to get bankable projects," Bert Hofman, country director of China, Korea and Mongolia at the World Bank, told the Global Times on Tuesday.
He noted new financing streams should be created for infrastructure projects, which usually generate profits through fees, taxes and subsidies.
"For example, a trust fund, which is basically financed from contributions, can then finance good project preparation," Hofman said.
He told the session of the forum Tuesday that the B&R initiative is about network effect, meaning that the combined value of all the projects is much larger than the individual ones.
