Post by Admin on Nov 15, 2024 22:26:36 GMT
globalsouth.co/2024/11/15/belt-and-road-clips-from-shanghai-to-chancay/
A Chinese-funded megaport project in Chancay, Peru inaugurated yesterday is expected to upend current shipping patterns and transform global trade for years to come. Coinciding with the Asia-Pacific Economic Cooperation (APEC) summit held in Lima, Chinese President Xi Jinping has traveled to Peru to attend via video the inauguration ceremony of the port. Once operational, Chancay will become the largest deepwater port on the western coast of South America, capable of docking container ships that cannot go elsewhere in South America and cutting shipping times from China in half, by up to 20 days.
This project, which Chinese banks financed with a loan worth nearly $1 billion, has provoked concern among policymakers in Washington and other Western capitals. China and Peru have grand visions for Chancay, with China’s ambassador to Peru describing its potential to be the “Shanghai of South America” and Peru’s transport minister stating that the goal is for Chancay “to become the Singapore of Latin America.” Chancay follows Beijing’s broader playbook for the 2.0 version of the Belt and Road Initiative (BRI 2.0)—and China’s portfolio in Peru stretches far beyond the port.
Beijing claims that the BRI is now focused on “small but beautiful” projects. However, China has not abandoned large-scale infrastructure projects during the BRI 2.0 era. It has instead changed the way in which it bankrolls such projects.
Chancay demonstrates that Beijing is pivoting from full-recourse sovereign debt transactions to limited-recourse project finance transactions. To finance the construction of the port, an independent legal entity (also known as a special purpose vehicle or SPV) was established as the borrowing institution of record. It is responsible for repaying the $975 million loan with the revenues generated by the port. The SPV (in this case, CSP Chancay) is majority-owned by a Chinese state-owned enterprise (COSCO) and minority-owned by an entity in the host country (Volcan)—a common ownership arrangement in the BRI 2.0 era.
During the first phase of the BRI, China’s policy banks (China Eximbank and China Development Bank) were responsible for most of the country’s overseas lending activities. Now, during the BRI 2.0 era, Beijing has ratcheted down its use of bilateral loans from the policy banks and scaled up its use of syndicated loans from commercial banks. It has done so to minimize repayment risks and subject infrastructure projects to more stringent environmental, social, and governance safeguards.
APEC 2024: China and Peru forge stronger ties!
t.me/cgtn/14682
Xi calls for leveraging success to upgrade China-Peru cooperation
t.me/cgtn/14686
Chinese, Peruvian leaders inaugurate Chancay Port, boosting Latin America's trade links
t.me/cgtn/14687
Chancay Port: A landmark project in China-Peru Belt and Road cooperation
t.me/cgtn/14684
A Chinese-funded megaport project in Chancay, Peru inaugurated yesterday is expected to upend current shipping patterns and transform global trade for years to come. Coinciding with the Asia-Pacific Economic Cooperation (APEC) summit held in Lima, Chinese President Xi Jinping has traveled to Peru to attend via video the inauguration ceremony of the port. Once operational, Chancay will become the largest deepwater port on the western coast of South America, capable of docking container ships that cannot go elsewhere in South America and cutting shipping times from China in half, by up to 20 days.
This project, which Chinese banks financed with a loan worth nearly $1 billion, has provoked concern among policymakers in Washington and other Western capitals. China and Peru have grand visions for Chancay, with China’s ambassador to Peru describing its potential to be the “Shanghai of South America” and Peru’s transport minister stating that the goal is for Chancay “to become the Singapore of Latin America.” Chancay follows Beijing’s broader playbook for the 2.0 version of the Belt and Road Initiative (BRI 2.0)—and China’s portfolio in Peru stretches far beyond the port.
Beijing claims that the BRI is now focused on “small but beautiful” projects. However, China has not abandoned large-scale infrastructure projects during the BRI 2.0 era. It has instead changed the way in which it bankrolls such projects.
Chancay demonstrates that Beijing is pivoting from full-recourse sovereign debt transactions to limited-recourse project finance transactions. To finance the construction of the port, an independent legal entity (also known as a special purpose vehicle or SPV) was established as the borrowing institution of record. It is responsible for repaying the $975 million loan with the revenues generated by the port. The SPV (in this case, CSP Chancay) is majority-owned by a Chinese state-owned enterprise (COSCO) and minority-owned by an entity in the host country (Volcan)—a common ownership arrangement in the BRI 2.0 era.
During the first phase of the BRI, China’s policy banks (China Eximbank and China Development Bank) were responsible for most of the country’s overseas lending activities. Now, during the BRI 2.0 era, Beijing has ratcheted down its use of bilateral loans from the policy banks and scaled up its use of syndicated loans from commercial banks. It has done so to minimize repayment risks and subject infrastructure projects to more stringent environmental, social, and governance safeguards.
APEC 2024: China and Peru forge stronger ties!
t.me/cgtn/14682
Xi calls for leveraging success to upgrade China-Peru cooperation
t.me/cgtn/14686
Chinese, Peruvian leaders inaugurate Chancay Port, boosting Latin America's trade links
t.me/cgtn/14687
Chancay Port: A landmark project in China-Peru Belt and Road cooperation
t.me/cgtn/14684
