New Ways Of Urban Infrastructure Financing - A Collection Of Commissioned Loan Research

Seeing that the large development needs and the promotion of urbanization, China is reexamining the current situation of infrastructure finance. The enormous demand for infrastructure finance and gradual liberalization of the domestic financial department will stimulate innovation in this market segment.In 2002, a new form of infrastructure finance has appeared. Some commercial banks debuted "public entrusted loan schemes" by intermediating funds between the social fund and the project of urban construction. They are attractive vehicles for investors who look to the commercial banks, official project promoters, and other enhancements as risk mitigation mechanisms that permit them to participate in otherwise complex and non-transparent financial packages for infrastructure investment.On the foundation of analysing in depth the domestic system of infrastructural investment and finance and current financing situation, the paper think that "public entrusted loan"can just be a kind of effective financing way, combined that the lack of infrastructural fund and the personal deposits increase continuously in our country. Since local government is not allowed to issue the municipal bond at present, the positive impact of raising the construction fund of the project by public entrusted loan will be quite far-reaching. The paper, on this basis, according to the characteristic and advantage of the trusted loan, design a set of public entrusted loan financing mode and operation mechanism under the less developed domestic capital market background. Besides, the paper also try to make preliminary research on pricing and riskmanagement of public entrusted loan, and then has put forward the corresponding suggestion for operation from system and market aspect. This instrument is likely to grow, especially if the roles of commercial banks and project sponsors are clarified and disclosure strengthened.