Partnership forms around New Silk Road

Infrastructure Investor, 20.12.2015

"Infrastructure will be among the priority sectors targeted by RDIF, CITIC, Renaissance and ONEXIM through the newly launched tie-up.

In an initiative to set the newly launched Russia-China Investment Bank in motion, a consortium of four Russian and Chinese investment vehicles have formed a strategic partnership focused on integration projects. 

Involved are the Russian Direct Investment Fund ( RDIF ), Hong Kong-based CITIC Merchant, frontier markets investment bank Renaissance Capital and Russian private investment fund ONEXIM Group.

A joint statement said the partnership would utilise the framework of the One Belt-One Road initiative in the hope to further integrate the Eurasian space "through development of an infrastructure belt along the historic Silk Road from China to Europe".

Geographically, the foursome will invest across Russia, the Central Independent States (CIS), China, the Middle East and Africa.

In a Q A with Infrastructure Investor , a source close to the endeavour explained that the partners will use Renaissance Capital's capacities to facilitate access to debt and equity, as well as its operational infrastructure and geographic presence, which are seen as "essential for prospective deals".

Renaissance chief executive Igor Vayn said the partnership creates "unprecedented opportunities" by establishing a framework for long-term investments from China into Russia and facilitating additional sources of capital throughout focus regions.

Equally optimistic, CITIC Merchant president Eric Bin Huang said the partnership "opens the door to a  much broader global alliance."

Rather than committing to fundraising and investment targets, our source said, "the possibilities of this partnership are endless, from the attraction of long-term investments from China to Russia, to the acquisition of additional sources of capital for companies across Renaissance Capital's entire geographic reach across Africa and from the Middle East to Central Asia."

Details could not be disclosed at this time as to how and where the private sector will fit into the scheme.

As for specific investments, Infrastructure Investor was told it is still too early to talk about projects because "there is still a lot of work to do," but conceptually, projects that are strategically important to the strengthening of the New Silk Road are likely to find favour.

"The partnership will target high-potential projects in various industries in which the RDIF, RCIF, CITIC Merchant and Renaissance Capital are already operating, such as agriculture and food, healthcare and retail, infrastructure (including housing, building materials, roads, transport and logistics), alternative energy, IT, telecom and natural resources processing," the source said.