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CDB Supports the Construction of over 100,000 km of Expressway

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Time:2021-05-28  Source:CDB

Lately, the longest tunnel of Guangxi Hezhou-Bama Expressway (Mengshan-Xiangzhou section) - Jinxiu Tunnel was completed, laying a solid foundation for the expressway to be opened to traffic at the end of the year. By then, the days when there is no expressway in Mengshan County, Guangxi will be gone for good, and the local economic development and rural revitalization will usher in new opportunities. The development of transportation infrastructure won’t be possible without financial support. Therefore, since the beginning of 2021, CDB has issued more than 20 billion yuan of expressway loans to Guangxi, focusing on supporting the construction of 32 key expressway projects from Hezhou to Bama, Liuzhou to Nanning via Heshan, Nandan to Xialao, etc., providing strong support for Guangxi to accelerate the construction of transportation infrastructure.

"Transportation infrastructure is fundamental for a region’s development." CDB has been supporting road construction for years. In 1998, in response to the Asian financial crisis, China took the countermeasures of increasing investment, expanding domestic demand and implementing an active fiscal policy. Among them, strengthening investment in transportation and other infrastructure areas is an important initiative. CDB held consecutive special meetings in an effort to come up with measures, i.e., adjusting credit structure, speeding up credit fund disbursement and shortening the review cycle, to increase investment in infrastructure, such as roads. In June 1998, CDB made a breakthrough in financial support for expressway construction by innovating a financing model and committing 2 billion yuan in loans to two expressways from Chongqing to Changshou and Changshou to Fuling. In that year, CDB issued a total of 24.05 billion RMB in loans for expressway projects and committed financing support to over 9,000 km of expressway construction. Since then, CDB has been actively playing the role of development finance function, continuously innovating financial service products and increasing its efforts to support road construction around the world. Up to now, a total of 4.3 trillion yuan of loans have been issued to support the construction of 100,000 km of expressways that have been opened to traffic, accounting for about more than 60% of the country's expressway mileage, making positive contributions to the building of a country with strong transportation network.

Since 2020, due to the impact of Covid-19, a number of expressway construction projects have encountered financial difficulties, and CDB has provided timely financial support to build the "arteries" of economic development and accelerate the construction of a new development pattern of "dual cycle". In Sichuan, CDB took the lead in forming a syndicate to support the Renshou-Muchuan-Xinshi Expressway and Mabian branch project from Renshou via Muchuan to Pingshan Xinshi Town, which is of great significance to drive economic and social development in the transitional zone of Sichuan, Yunnan and Guizhou and the Liangshan region. Affected by the pandemic, the construction encountered a temporary capital constraint and the project progress was affected. CDB Sichuan Branch quickly issued a loan of 1 billion RMB to support the resumption of construction of the Renshou-Muchuan-Xinshi Expressway and ensure its opening to traffic in 2020. In Hunan, CDB has provided over 240 billion yuan of credit and issued over 150 billion yuan of loans to expressway projects in the province, supporting the smooth commissioning of more than 40 expressways, such as the Xiangyang-Leiyang, Changde-Zhangjiajie and Xiangtan-Shaoyang Expressways. Especially in response to the impact of the pandemic, CDB issued emergency loans of 1.1 billion yuan for resumption of work and production, which guaranteed the financial needs of Hunan's expressway operations.

The construction of rural roads not only serves as a way to lift people in rural areas out of poverty and increase their income, but constitutes a sure route to rural revitalization. During the 13th Five-Year Plan period, CDB supported the construction of 310,000 km of rural roads in poverty-stricken areas, greatly improving people's production and living conditions. In Guizhou, CDB conscientiously implemented the guidelines of the central government by focusing on aligning the efforts to consolidate and expand the achievements in poverty alleviation with those to promote rural revitalization. Taking the opportunity of rural road construction reform in Guizhou Province, CDB cooperated with the local government to improve policies and mechanisms and as a result, put forward the financing model of "building roads before granting subsidies, which take the form of awards". CDB enabled greater, faster, better and more economical results in the construction of rural roads by granting 9.68 billion yuan worth of medium and long-term loans for upgrading and reconstructing 12,000 km rural roads in 89 counties (cities, districts, special zones) of Guizhou Province, an endeavor that is expected to benefit about 7.8 million rural population. CDB’s exploratory effort provides a great example for development finance institutions to support the high-quality construction, management, maintenance and operation of roads in rural areas and boost the revitalization of rural areas.

Going forward, CDB will actively dovetail with the requirements of the national 14th Five-Year Plan, strengthen cooperation with relevant ministries, local governments and key enterprises, and explore market-based financing models. It will also improve differentiated policies, actively participate in the preparation of relevant plans, and take major projects as the starting point to provide support for the construction of comprehensive transportation corridors, networks and hubs, urban clusters, rural transportation, green and intelligent transportation, as well as the development of "transport +" emerging areas, such as four-network integration and industrial integration. By doing so, CDB will contribute its own share in making China a country with robust transportation networks and a new, dual-cycle development architecture.