CPD FUND HELPS SMES ‘GO GLOBAL’

The China-Portuguese-speaking Countries Co-operation and Development Fund (CPD Fund), which is jointly financed by the China Development Bank and the Macao Industrial and Commercial Development Fund, was established more than three years ago to support development projects and investment in Mainland China and Portuguese-speaking Countries. The CPD Fund has made good progress since then. The managers of the CPD Fund are now considering how to make it easier for more small and medium-sized enterprises (SMEs) in Macao obtain finance to expand their businesses.

Since its establishment the CPD Fund has encouraged Mainland Chinese and Macao enterprises to invest in Portuguese-speaking Countries and find opportunities for co-operation there. In October 2016, during the 5th Ministerial Conference of the Forum for Economic and Trade Co-operation between China and Portuguese-speaking Countries, Premier Li Keqiang announced that the headquarters of the CPD Fund would move from Beijing to Macao, to better support the expansion of Macao enterprises into markets in Portuguesespeaking Countries.

Until the headquarters of the fund is transferred, the Macao Trade and Investment Promotion Institute (IPIM) will offer Macao enterprises any help they need to apply for funding, including referrals, taking applications or other relevant service. To give businesses a better understanding of how the CPD Fund works, IPIM held on 25 January 2017 an event called Portuguese-speaking Countries Business Opportunities Series – “Seminar on China and Portuguese-speaking Countries Co-operation and Development Fund and Investment Promotion in Portuguese-speaking Countries”. More than 250 representatives from Macao business associations and enterprises attended.

IPIM’s Executive Director Gloria Ung, speaking on the sidelines of the event, said the managers of the CPD Fund were considering a new financing model for SMEs, which would make it easier for such businesses to apply for funding and expand into the markets of Portuguese-speaking Countries.

The CPD Fund focuses on investing in infrastructure such as transport and telecommunications, as well as in fields including agriculture, manufacturing, energy and natural resources. The CPD Fund will not guarantee or invest in any project not permitted by the governments of Mainland China and the Portuguese-speaking Country concerned.

Managing Director of CPD Fund Management Company Jin Guangze told Macao Image the fund assessed carefully the value of every projected investment and the risks attached, to see whether the project required a strict review. Once an applicant has supplied all the necessary information, it generally takes about a year to decide whether to support an investment.

“We need to conduct a professional assessment to make a judgment, including a professional report on the technical aspects and a feasibility report on the entire business plan, as well as legal reports and tax reports,” Ms Jin said. “Given this process, some SMEs might think that we have too many requirements,” she said.

The CPD Fund is now planning to introduce various measures to help more SMEs, including soliciting the help of large enterprises to shore up support for SMEs.

More than 250 representatives from Macao business associations and enterprises attended the seminar

Large enterprises lead

Ms Jin said the CPD Fund would in future consider reaching out to Macao enterprises through business associations, as a way of starting discussions about investments with potential. Macao business associations can also co-operate and discuss with large enterprises in Mainland China. Ms Jin said that if a large Mainland Chinese company became the main partner in a projected investment, SMEs might be invited to join. She said these might be potential co-operation models in the future. Ms Jin told Macao Image that the CPD Fund has begun compiling a report on the systematic analyses of the economic structure of various Portuguese-speaking Countries, identifying potential industries for investment and liaising with enterprises with investment potential.

The CPD Fund has US$1 billion to finance projects. Ms Jin said that so far the CPD Fund had financed three projects: the Wanbao Grains & Oils agriculture project in Mozambique, the Zhejiang Yongda electricity transmission and distribution and water supply equipment production and trading project in Angola and the Artes solar power project in Brazil. The CPD Fund is also considering forming a partnership with Macau Legend Development to invest in the construction of a 5-star resort hotel in Cape Verde. Ms Jin said the fund was in the process of making a decision, having done in-depth research on the project.

“I believe that when the headquarters of the CPD Fund moves to Macao, it will be at the very least helpful for enterprises and all other concerned parties in Macao to get to know how it works,” Ms Jin said. “The negotiations will be more fruitful if an enterprise has a good opportunity to grasp.”

IPIM’s Ms Ung said an inter-departmental co-operation group set up under the auspices of the Macao SAR Government Secretariat for Economy and Finance was busy preparing for the transfer of the CPD Fund headquarters to Macao. She said it was hoped that once all the administrative processes had been completed, the headquarters would move to Macao this year.

Managing Director of CPD Fund Management Company, Jin Guangze