IGTA Journal - Autumn 2017

www.treasurers.org/thetreasurer November/December 2017 The Treasurer 33 will need special assistance with settling transactions. Escrow facilities may be necessary in order to facilitate secure investment given the characteristics of the region. BRI has already prompted a wave of M&A activity; companies will require appropriate advice. Much of the finance for Chinese companies taking part in BRI is likely to come from the Chinese government’s Silk Road Fund, China’s policy banks (Agricultural Development Bank of China, China Development Bank and the Export-Import Bank of China), China’s big four state- owned banks, and the Asian Infrastructure and Investment Bank. In this regard, two Chinese banks have already been granted licences to operate in Pakistan; the most recent is Bank of China, which has 19 of its branches located in countries that are part of BRI. However, both Chinese companies and those in MENAPT will also need to access funding from international banks in the form of project finance, syndicated loans, bonds and export credit agency, and multilateral agency support, including that of the Chinese export credit agencies. Chinese and local corporates will also typically require access to traditional trade finance solutions, long- term funding for projects, cash-collection solutions and risk-mitigation structures. Instruments such as standby letters of credit, performance bonds and techniques such as bill and invoice discounting will be essential tools for treasury. Where possible, treasury must be optimised by linking trade and cash management. For example, innovative reconciliation tools can be integrated into receivables ƪows to improve eƥciency and enhance working capital management. Choosing the right partner The countries that BRI spans are extremely diverse, with a variety of regulatory environments and business practices. For companies active in MENAPT seeking to prosper from the opportunities presented by BRI, it is essential to work with a banking partner that understands the specific challenges of the region and has experience of how to help clients achieve their strategic objectives. In this regard, banks with a strong international footprint coupled with an on- the-ground presence in those countries impacted by BRI and an in-depth knowledge of local conditions, regulatory and legal frameworks would David Aldred (left) is head of cash management product; Yusuf Ali Khan (middle) is head of trade; and Jagadeshwaran Kothandapani (right) is head of sales, Middle East, North Africa, Pakistan and Turkey, Citi Treasury & Trade Solutions 1 energy.gov/sites/prod/files/2016/ 04/f30/China_International_ Analysis_US.pdf be best placed to offer specialist support to Chinese companies requiring access to financing or seamless movement of funds. IGTA eJournal | Autumn 2017 | 51