Sources say Everbright Bank Co is among parties in talks to contribute capital to a joint investment fund being set up by China and Saudi Arabia
Everbright Bank Co, the Beijing-based lender, is among parties in talks to contribute capital to a joint investment fund being set up by China and Saudi Arabia that’s targeting as much as $20 billion, people with knowledge of the matter said.
China’s state-owned Silk Road Fund is separately discussing participating in the investment vehicle, the people said, asking not to be identified because the information is private.
The Gulf kingdom’s Saudi Industrial Development Fund is also backing the pool of capital, according to the people.
The joint fund will be used to invest in strategic projects in the two countries, one of the people said. It may first raise a smaller amount in the range of around $14 billion to $16 billion, though the exact size and investors are still being determined, the people said.
China overtook the US as Saudi Arabia’s biggest trading partner in 2013 and accounted for about 15 percent of all Saudi imports and exports in 2018, according to data compiled by Bloomberg.
The Asian country has previously set up joint investment funds with other nations, including Russia, as it seeks to boost its political clout and revive ancient trading routes under the “One Belt, One Road” project.
The Export-Import Bank of China and Hungarian Export-Import Bank set up a fund in 2013 for investments in central and eastern Europe. In October, Saudi Arabia’s Public Investment Fund announced a $500 million investment in the Russia-China Investment Fund, which targets consumer and infrastructure deals in the two countries.
Representatives for Everbright Bank and the Silk Road Fund declined to comment, while China’s Finance Ministry didn’t immediately reply to a request for comment. SIDF and the Saudi government didn’t immediately respond to requests for comment.
“Recently, Crown Prince Mohammed visited China and co-chaired the third meeting of the China-Saudi Arabia High-Level Joint Committee with China’s Vice Premier Han Zheng,” a representative for China’s Foreign Ministry said.
“China and Saudi Arabia exchanged in-depth views on pragmatic cooperation in various fields and reached broad consensus, including cooperation in the financial field.”For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.