2021-06-21

One trillion yuan of social investment was leveraged in the past five years!

(29-APR-2021)


The picture shows China PPP fund investment project-the PPP project of Guangnan to Nasa section of the S19 Guangnan-Xingjie expressway of Wenshan Prefecture expressway network in Yunnan Province.

 

On the project investment map, China Government-Enterprise Cooperative Investment Fund Co., Ltd. ("China PPP Fund") is active in various fields such as rail transit, old city reconstruction, scientific and technological innovation industrial park, economic development zone construction, from the Great Northwest to the South of Sea, and from the inside and outside of the Great Wall to the north and south.

 

The person in charge of the China PPP Fund stated that as the only "national team" in the field of guidance funds and PPP, China PPP Fund has shifted from its focus on the number of projects and the scale of investment to improving project quality and moderation through five years’ continuous development. It has expanded the scale of investment, focusing on strengthening post-investment management, striving to innovate investment models, and paying more attention to changes in the demonstration role of projects, and completed various tasks properly.

 

Aim at key regional areas to optimize investment layout

 

PPP application promotion is a major institutional reform to meet the requirements of "transforming government functions, optimizing resource allocation, and deepening reform and opening up". China PPP Fund established in March 2016 with a registered capital of 180 billion yuan. Since its establishment, China PPP Fund has upheld the mission of “making good use of the guidance funds and fully stimulating the involvement enthusiasm of social capital”, continuously improving political positions, strengthening responsibility, and giving full play to the role of “guidance, standardization, and credit enhancement” to ensure PPP reform and development convoy.

 

2020 is the fifth year of the establishment of China PPP Fund acting as the "national team" in the PPP field. It is also a year to strengthen responsibility, actively meet challenges, and plan for new development. China PPP Fund strove to improve its political position, adhered to policy orientation, concentrated financial resources, and spared no effort to serve national strategies and key areas in this extraordinary year.

 

The three major battles are major national strategies that have continued to advance in recent years. China PPP Fund responded positively and resolutely implemented it. In terms of supporting targeted poverty alleviation, China PPP Funds promoted the implementation of the PPP model in poverty-stricken areas by actively playing the role of guiding credit enhancement, strengthening investment and loan linkage with shareholders. To support the fight against pollution prevention and control, actively research projects such as rural sewage treatment to provide support for the promotion of the PPP model in the areas of rural revitalization, sanitation and health.

 

Guiding private capital to actively participate in infrastructure construction and providing public services is not only one of the tasks of PPP reform, but also an important way to stimulate private investment. China PPP Fund has conducted in-depth research on the characteristics of private capital in various industries, and promoted in-depth cooperation with private enterprises with strong strength in the PPP field and scientific governance structure, which not only promoted the development of PPP standards, but also helped the growth of the private economy.

 

Five years of hard working resulted in fruitful achievements. From its establishment to the end of 2020, China PPP Fund has signed a total of more than 130 projects, with a total contract value of more than 72 billion yuan, and a total investment of more than 1.1 trillion yuan in projects. Among the contracted projects, more than 90% of the major national strategic projects are involved. In terms of regions, supporting key regions such as the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Yangtze River Delta were given priority.

 

According to incomplete statistics, China PPP Funds has mobilized trillions of social investment, and the guiding effect is significant in the past five years.

 

The person in charge of the China PPP Fund said that they would carefully sort out the distribution of project investment in various industries from a new starting point to look forward to the future, and on the premise of adhering to the bottom line of compliance. They would also analyze the project characteristics, existing problems and solutions of urban rail transit, toll expressway, water treatment and other industries in a targeted manner, and provide scientific guidance for investment in the next step .

 

Hedging the impact of the epidemic and vigorously supporting the resumption of work and production

 

The outbreak of the Covid-19 in early 2020 has had a huge impact on China's economic and social development, and the normal progress of some projects has been affected. The China PPP Fund attached great importance to the shortage of project capital, slow progress in loan financing, and difficulties in handling project-related procedures. It sped up project signing and funding progress, fully supported the resumption of work and production, and escorted the acceleration of the resumption of key projects.

 

China PPP Fund has stepped up and communicated closely with partners such as China Railway Construction Chongqing Investment, Railway Construction Fund, etc. They negotiated the contract conditions, and continuously improved the details of the agreement, in response to the capital shortage and difficulties faced by Chongqing Rail Transit Line 5A (Fuhua Road-Tiaodengnan) PPP project when the PPP project is about to be fully carried out. The contract was successfully completed in early March 2020, providing a strong guarantee for the resumption of work and production of the project.

 

China PPP Fund also tracked and counted the financial service needs of invested projects in a special period in a timely manner. It takes advantage of coordinating relevant shareholder units and financial institutions, guiding credit enhancement, and trying its best to clear the blockage of project financing.

 

The comprehensive improvement project of the river course and anti-waterlogging facilities in the Qiaobei area of Pukou District is a key project of ecological and environmental protection construction in Nanjing, and the construction period is also affected by the epidemic. This project is urgent to resume work because it is closely related to the lives of 600,000 people in the Jiangbei New Area. China PPP Fund accelerated the internal audit process, starting from receiving the payment notice of project company, finishing the internal funding process approval and other tasks in the shortest time, and completing the project fund allocation in a timely manner in response to the funding gap for the project resumption. At the same time, it coordinated with shareholders such as Industrial and Commercial Bank of China and China Construction Bank to promote project financing and help the project resume work and production. To this end, the China Railway 12th Bureau sent a letter of appreciation to express its gratitude and affirmation for the efficient support from China PPP Fund in solving project capital financing and stimulating bank loans.

 

In addition, China PPP Fund is also actively planning and cooperating with all parties to accelerate the implementation of the project. With China Railway Corporation Limited to achieve strategic cooperation as scheduled, the two parties reached an agreement on jointly promoting the Wuhan Jianghan Seven Bridge PPP project and other 12 project cooperation, involving a total investment of more than 100 billion yuan.

 

It is said that China PPP Fund actively adapted to the latest situation of the domestic PPP market in accordance with the major strategic deployments of the Party Central Committee and the State Council during the COVID-19 pandemic, initiatively communicated and negotiated with major central enterprises that have long-term cooperation, and clarified the selection criteria for key projects. It actively expanded cooperation in the field of new infrastructure, and initially identified nearly a hundred key cooperation projects, some of which have initially reached cooperation intentions, laying a solid foundation for comprehensively advancing investment work.

 

To lay a good system foundation and improve post-investment management capabilities

 

China PPP Fund always pays attention to the project post-investment management in order to realize investment period covering the entire life cycle of the PPP project.

 

According to reports, due to the complex external economic environment, the continuous increase in the number of projects, and the increasing depth of management, project post-investment management has shown a trend of diversification and complexity with the continuous development of China PPP Fund in the process of project implementation.

 

The post-investment management of China PPP Fund has entered a new stage in 2020. Fund Manager—China Government-Enterprise Cooperative Investment Fund Management Co., Ltd. ("Management Company") will continue to improve the three-level rules and regulations system of methods, regulations, and operating guidelines to lay a good institutional foundation for the post-investment management work to have rules to follow and follow the rules.

 

For example, comprehensively considering factors such as regional level of the project and risk assessment, the investment projects are divided into three categories: key prevention, guidance and correction, and normal monitoring, and differentiated management. Paying attention to projects with major changes to ensure the safety of fund investment. Participating in project corporate governance by the comprehensive use of quarterly reports, resolution of proposals and on-site investigations and other methods.

 

China PPP Fund also paid attention to the improvement of investment research capabilities, and worked hard on research team building and professional field research in order to improve management capabilities. At present, the establishment of China PPP Fund subject research database has been preliminarily completed, and studies on the feasibility and sustainability of the implementation of the "long-term actual payment" model, government expenditure responsibilities, and financial affordability have been completed. China PPP Fund compiled and distributed tax optimization arrangements for indirect equity investment models, and multi-level local governments share and unified PPP project financial expenditure responsibilities, etc., so as to form a good atmosphere for research to promote business.

 

Strengthen internal control management to promote high-quality development

 

For China PPP Fund, the year of 2020 is an important time to further improve the quality of investment, and to standardize the operations as well. In this year, China PPP Fund vigorously strengthened risk control through standardized operation and management, orderly promotion of corporate governance, and strengthening of the construction of internal control mechanisms.

 

In order to prevent and control fund asset operation risks and operational risks, China PPP Fund will further strengthen internal control management, standardize business processes, refine job responsibilities, and strengthen supervision and assessment in 2020. At the same time, the directors and supervisors of the IMF company went to many places to conduct in-depth field investigations on the front line of the project, and discussed issues such as the investment model of China PPP Fund, the construction and operation of PPP projects, and financing channels and paths.

 

With regard to the future development, the relevant person in charge of China PPP Fund stated that the Fund will aim to promote high-quality development, increase the development of key regional markets, explore feasible paths for the PPP model to support the rural revitalization strategy, and strengthen the new infrastructure and new urbanization initiatives and major projects, project reserves in areas such as urban renewal and transformation. It will continue to improve the post-investment management capabilities and the value of investment projects, and achieve the goal of achieving 100% of the completion rate of the income plan and the timely rate of resolutions. At the same time, it will continue to promote the construction of the internal control system, expand new types of capital business in a timely manner, continuously improve the corporate governance structure, standardize operation and management, and provide business support.

 

2021 is the first year for China to implement the "14th Five-Year Plan" and embark on a new journey of building a socialist modern country in an all-round way. It is also the fifth anniversary of the establishment of the China PPP Fund. The person in charge of China PPP Fund stated that as a central financial enterprise, guided by Xi Jinping’s thoughts on socialism with Chinese characteristics in the new era, and under the leadership of the Party Group of the Ministry of Finance, China PPP Fund will continue to play the role of “guidance, standardization, and credit enhancement”. It will stick to scientific investment, strict risk control, efficient operation, and innovative exploration of solutions to difficult problems encountered in development, aiming to contribute to the sustainable development of China PPP , and to present outstanding achievements for the 100th anniversary of the founding of Chinese Communist Party. (Reporter: Zhang Heng)

 

 

China Finance News


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