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Beijing has promoted the PPP model, which channels private money
into public infrastructure projects, as local governments reel
under heavy debt. But private investors have shown only lukewarm
interest in such projects, which typically lock up capital for
lengthy periods.
The China Securities and Regulatory Commission (CSRC) said on
its official microblog that the Shanghai and Shenzhen stock
exchanges have approved the securitization schemes for multiple
PPP infrastructure projects.
"Asset securitization can make existing PPP assets more liquid,
expand the funding channel for infrastructure projects, lower
financing costs, and better attract private capital
participation," CSRC said.
Through securitization, infrastructure assets are turned into
publicly-traded securities, freeing up capital while also
meeting the demands of longer-term investors such as mutual
funds and pension funds.
The Shanghai Stock Exchange (SSE) said on Friday that it has
approved securitization plans for three PPP projects, including
a water treatment project that will raise 530 million yuan
($76.7 million), and one for a tunnel, which intends to raise
1.16 billion yuan.
CSRC said the stock exchanges are reviewing applications from
the first batch of nine PPP projects that want to issue
securities.
(Reporting by Samuel Shen and John Ruwitch; Editing by Richard
Borsuk)
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