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The export credit agencies (ECAs) of China and Thailand are to co-finance high-speed rail and power sector loans in Southeast Asia.

The joint lending will take place through Cambodia, Laos, Myanmar and Vietnam, with China Exim and Exim Thailand seeking to secure export contracts for their respective nations in large regional projects.

The president of Thailand Exim, Pisit Serewiwattana, says that discussions are ongoing and that by partnering, the two agencies could ensure that the borrowing costs are kept to a minimum.

In May, Thailand and China agreed a US$5bn infrastructure package, which would fund the first stage of the high-speed rail network in Southeast Asia. The 252km stage will stretch from Kunming in China to the Thai-Laotian border.

The completed network will link 10 cities in Southeast Asia, as part of the Pan-Asia Railway Network, thousands of kilometres and act as a huge boon to regional trade. Freight will be able to travel from southwest China to Singapore in 10 hours. It will provide a much-needed boost to dilapidated infrastructure among the poorest nations in the region. It will include a 410km route through Laos, costing US$5.8bn. China will cover 70% of these costs.

While the two ECAs have yet to agree on a figure, their co-financing announcement will be seen as a way of galvanising private financing for the projects. Private finance for large infrastructure projects has been traditionally difficult to secure. The backing of two of the most active government financing agencies in the region might act to loosen some of the purse-strings.

Meanwhile, at a briefing in Hong Kong this week, the Asian Development Bank (ADB) promoted the public-private partnership (PPP) model as a way of filling the infrastructure gap.

“PPPs, if done right, have the potential to fill the region’s huge infrastructure needs, leveraging the capabilities and resources of the private sector towards the common goal of sustainable development for all,” Yasuyuki Sawada, chief economist at the ADB, told gathered press.