Kuwait is planning to create a $10bn fund with China to invest in the two countries, relating to the Silk City and islands development.
China and Kuwait would each be responsible for raising around $5bn for the fund. The Asian country would also work with Chinese strategic partners to arrange debt financing for projects, which could give the fund an investment capacity of as much as $30bn.
Under the proposal, the fund’s Chinese backers could introduce strategic partners to work on its investment projects as contractors, according to the people. Deliberations about the fund are at an early stage, and details like the size and investment targets could change.
“Silk City and development of the islands is the signature project in the development plan for New Kuwait 2035,” said Khaled Mahdi, secretary general of Kuwait’s Supreme Council for Planning and Development.
“There are three prerequisites for the signature project to be realised: the special economic zone law, a private-sector finance model, and the master plan.”
Kuwait is developing its northern region as it seeks to boost non-oil revenue and transform itself into a regional business hub by 2035.
The multibillion-dollar Silk City project, which has been planned for more than a decade, is part of this goal.
This edited article first appeared in Arabian Business.