State-owned China Railway Construction Corp. (01186.HK, 601186.CN) has signed US$5.5 billion worth of contracts in Africa.
The deals include a US$3.5 billion intercity rail line in Nigeria and a US$1.9 billion residential real estate project in Zimbabwe, the Financial Times reported, citing stock exchange filings.
The company also clinched a US$12 billion contract for a separate rail line in Nigeria last November, days after Mexico canceled a US$3.6 billion high-speed rail contract with a consortium led by CRCC.
The contracts are some of the tangible results of China’s One Belt, One Road strategy to build infrastructure across the developing world, the newspaper said.
The 21st Century Maritime Silk Road and the land-based Silk Road Economic Belt are expected to drive sales for Chinese trainmakers, port operators and electricity producers in the face of overcapacity at home, FT said.
Last week state media reported that China’s central bank would use the country’s foreign exchange reserves to inject US$62 billion in fresh capital into the country’s policy banks, which are expected to play a key role in supporting the New Silk Road projects.
However, CRCC said financing for its rail project has not been finalized.
In addition to the policy banks, China has also pledged to create set up a US$40 billion Silk Road Fund to finance overseas investments.
The China-led Asia Infrastructure Investment Bank, in which at least 47 countries will participate, could be another source of funding, the report said.
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