China's ICBC says 'unaware' of $50 bln Brazil fund plan
SAO PAULO/BEIJING May 15 (Reuters) - Industrial and Commercial Bank of China Ltd, the world's largest bank by assets, said on Friday it is not aware of plans to create a $50 billion fund to finance infrastructure investments in Brazil.
On Wednesday, two Brazilian government sources told Reuters that a memorandum of understanding between ICBC and Brazil's Caixa Econômica Federal to create the fund will be formally announced next week, when Chinese Premier Li Keqiang visits South America. A third source with direct involvement in the talks confirmed the plan on Thursday.
Under the terms of the plan, ICBC would provide the financing for the fund, the sources told Reuters on condition of anonymity. They added that ICBC and Caixa still need to agree on a regulatory framework as well as the scope of the projects to be financed.
"ICBC highly values the cooperation with Brazilian financial institutions and will actively promote China and Brazil economic collaboration based on commercial principles and support areas such as Brazil's infrastructure," a spokesman for Beijing-based ICBC said in WeChat social media platform, adding that the lender was "not aware" of the fund.
Caixa declined to comment. Efforts to obtain confirmation of the plan from ICBC's São Paulo-based officials earlier this week were unsuccessful.
The plans underscore China's growing influence as a major sponsor of large investment projects in Brazil at a time when Latin America's largest economy is grappling with a ballooning budget deficit and scarce access to capital markets financing. Similar investment structures were set up in Mexico and Ecuador, with ICBC acting as their main financial sponsor, the sources said.
In January, Chinese President Xi Jinping pledged $250 billion in investment in Latin America over the next 10 years as part of a drive to boost resource-hungry China's influence in a region long dominated by the United States.
In preliminary discussions, the Brazilian and Chinese governments discussed the possibility that the fund finance a railway link from Brazil's Atlantic coast to the Pacific Ocean in Peru to cut the cost of exports to China, two of the sources said. The fund may also pour money into a joint venture aimed at producing steel in Brazil, those sources said. (Reporting by Guillermo Parra-Bernal in São Paulo and Shu Zhang in Beijing; Editing by Todd Benson and W Simon)
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