Finance plays a key role in the future of the Belt and Road – green finance must be factored into all Belt and Road projects. This will serve to minimise the risk of stranded assets and aborted projects, maximise financial efficiency and secure our environment’s future. Financing the BRI requires the participation of both public and private investors. Embedding the principles of sustainable development across all asset classes, financial products, project phases and participating institutions is critical for the shared interest of project developers, sponsors, investors, and host communities. The "
China Belt and Road Initiative (BRI) Investment Report 2023" by FISF Fudan University found that preliminary data on Chinese engagement through financial investments and contractual cooperation for the first half of 2023 in the 148 countries of the Belt and Road Initiative show about 102 deals worth USD43.3 billion. This equals about 60% of China’s BRI engagement in all of 2022 (USD72.6 billion). The share of Chinese engagement in the BRI through investments compared to construction has seen its highest levels in the first half of 2023. China’s financing and investment spread across 45 BRI countries in 2023, with 24 countries receiving investments and 29 with construction engagement.
Case: ICBC
The Industrial and Commercial Bank of China (ICBC), launched a four-tranche US$ 2.2 billion bond to finance green projects from the Belt and Road initiative in 2019. The ICBC described the bond issuance as “the world's first green Belt & Road Inter-bank Regular Cooperation bond (“BRBR” bond).” According to ICBC's Green Bond Framework, the funds are to be used for projects pertaining to renewable energies, low carbon emission transportation, energy efficiency and sustainable water and wastewater management. According to the ICBC, these bonds were underwritten by 22 institutions from over ten countries and regions along with the Belt and Road initiative. The initiative aims to improve regional cooperation and connectivity and strengthen infrastructure, trade, and investment links between China and 65 other countries[1].
Source: Nordic Sustainable Investment
[1] ICBC. (2019). ICBC Successfully Issued the World’s First Green BRBR Bond. https://www.icbc.com.cn/icbc/en/newsupdates/icbc%20news/ICBCSuccessfullyIssuedtheWorldsFirstGreenBRBRBond.htm