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Germany’s Commerzbank has signed a co-operation framework with the Industrial and Commercial Bank of China (ICBC) to work together on Belt and Road Initiative (BRI) projects.

The agreement will see Commerzbank aim to lend US$5bn to BRI projects over the coming five years and marks the first time a German bank has signed a memorandum with ICBC, the largest bank in the world by assets.

ICBC is one of the primary banks involved in BRI projects to date. Upon its announcement, many international banks predicted greater involvement in the scheme, which seeks to rebuild the ancient Silk Road and add a maritime belt to the trading route, connecting the hubs of China with Central Asia, Europe and Africa.

However, much of the work has to date been funded centrally, through policy bank loans and government-to-government loans, or by China’s commercial banking sector. Asia-focused international banks such as HSBC and Standard Chartered have publicised their involvement in the BRI, as has Commerzbank’s German rival Deutsche Bank.

Commerzbank economists expect foreign direct investment from China to BRI countries to double to US$25bn by 2020.

This agreement will see Commerzbank and ICBC collaborate on funding, investment and risk management. Specifically, areas in which they will work together include trade finance, corporate advisory, debt capital market, transaction banking and asset management.

The pair have worked together previously, most recently when Commerzbank acted as bookrunner on a term loan facility and bond issuance ICBC made earlier this year. Commerzbank’s divisional board member responsible for global financial institutions, Nikolaus Giesbert, says the move is a natural one.

“Commerzbank’s strong distribution capabilities in Europe combined with ICBC’s knowledge of the Chinese market will add value for German and European corporates as they navigate business opportunities along the trading corridors, and support Asian companies seeking to do business in Europe,” he says.

Interestingly, the deal was announced just days after the Chinese President Xi Jinping met with the European Council president Donald Tusk and his counterpart at the European Commission, Jean-Claude Juncker, in Beijing.

The purpose of the meeting was to explore ways in which China and the EU can build ties. It came shortly after US President Donald Trump’s chaotic tour of Europe, and the language in the official communique seems a direct rebuke of Trump’s anti-multilateral stance.

“China and the EU are both builders of world peace, contributors to global development and defenders of the international order,” Xi said.

For years, the EU has been trying to force China to accept more European investment in its borders and companies. China has been hoovering up shares in European corporates and assets for decades.

A recent report by think tank Mercator Institute for China Studies found that “while Chinese investors enjoy the same rights in the EU market as any European business, China continues to limit access for foreign companies in many sectors. Apart from that, there is rampant informal discrimination of foreign firms”.

In its recent whitepaper on the BRI, Commerzbank acknowledged the huge investment in Europe by Chinese entities. It also voiced hopes that it could partner with German companies looking to invest in China and other BRI countries, through this agreement.

“As a market leader in foreign trade for Germany, it is part of our DNA to support our clients in their investment ventures abroad. Rely on our product expertise and knowledge of the local customs and business environment to support you in your first steps along the BRI,” the whitepaper reads.