17 October 2019

CIRC eyes insurers for project financing, paper says

China’s insurance regulator is exploring ways to tap insurance funds for infrastructure financing, China Securities Journal reported Tuesday, citing vice chairman Wang Zuji.   

The China Insurance Regulatory Commission (CIRC) is looking to meet the funding needs of key infrastructure projects such as railways, underground pipes, garbage management and public transport.

The CIRC is considering various financing options such as asset-backed funds, income securitization, preferred shares and convertible loans, Wang was quoted as saying.

Insurers have invested 92.9 billion yuan (US$14.94 billion) in affordable housing projects in Shanghai, Tianjin, Wuhan, Nanjing and Chongqing. Five are investing a combined 15.3 billion yuan to build 10 elderly home communities.

About 60 percent to 70 percent of insurance funds, or 6.12 trillion yuan to 7.14 trillion yuan, indirectly funds urbanization development projects through bonds and equities, industry data shows.

The remainder is direct investment in infrastructure, the report said.

– Contact HKEJ at [email protected]