WASHINGTON, D.C., August 27, 1999 -
The International Finance Corporation is promoting private ownership of infrastructure in China with a US$16.1 million indirect equity investment in Shanghai Midway Infrastructure Holdings Limited (Midway), a Chinese private investor in infrastructure.
The project responds to Chinese government efforts to attract private capital, backed by revenues from toll roads, to the highway sector. Midway is one of the first local private Chinese companies to put together such toll road assets. The project is expected to have a strong demonstration effect in encouraging other Chinese private companies to invest in infrastructure. The government's efforts to improve the country's infrastructure will benefit from the development of local private companies with the know-how and funds to invest in financially viable infrastructure projects.
Midway, an infrastructure holding company, already owns four operating highway sections in Zhejiang Province. It will use the proceeds of the current capital increase to finance the acquisition of four more toll road concessions in Zhejiang and Jiangsu Provinces, which will expand the total road concessions under its ownership to 215 km.
Mr. Declan Duff, IFC director of telecommunications, transportation, and utilities, said the project was the first IFC investment in a Chinese private investor in infrastructure as well as IFC's first in China's highway sector. The project shows how effective cooperation between the Chinese private sector and local governments can help to build the country's infrastructure, he added.
The main shareholder of Midway is the Narada Group, a diversified Chinese business group with interests in real estate, manufacturing, commodities brokerage, and infrastructure. The AIG Asian Infrastructure Fund II L.P., a private equity fund managed by Emerging Markets Partnership of Washington D.C., will make a parallel investment with IFC.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. It fosters economic growth by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
