China Infrastructure

1.4 Under the Prosperity Fund, the Authority seeks to procure a Delivery Partner to design and implement a 3-year technical assistance programme on Infrastructure with China (the China Infrastructure Programme, or Programme), as set out in this Statement of Requirements ("SOR"). The Programme will run to March 2022. The total budget available for the Programme is a maximum of £10 million (inclusive of VAT and all applicable government taxes).

1.5 The China Infrastructure Programme is one of several Prosperity Fund programmes in China (the China Prosperity Fund Portfolio), which are intended to support inclusive growth, poverty reduction and sustainable development in China and in ODA-eligible third countries (for more information please see the Outline Business Case in Appendix 1).

1.6 Infrastructure development is fundamental to creating prosperity and security, especially in emerging economies. Investment in public infrastructure can be extremely beneficial for poverty reduction and development where it takes account of the barriers and facilitates access of the poorest to markets, technology, finance or public services (health, education, water and sanitation).

1.7 There is currently a significant global deficit in infrastructure investment. The current "infrastructure gap" in low and middle-income economies is estimated to be around $1 trillion annually.

1.8 China has become a major player in infrastructure and construction globally, and China's Belt and Road Initiative (BRI) will further strengthen its international infrastructure footprint. Chinese financing for BRI infrastructure projects is estimated to amount to over $1 trillion over the next decade.

1.9 An investment of this scale has the potential to significantly increase China's contribution to global economic development, particularly in countries and regions where the BRI is focussed, including in Southeast Asia, South Asia, Central Asia and Africa. In order maximise this potential, it is essential that BRI infrastructure projects are financially, commercially, environmentally and socially sustainable.

1.10 Increased international private capital investment will be required to bridge the "infrastructure gap", particularly in emerging and developing countries, and to fully realise the development and prosperity ambitions of the BRI. BRI has the potential to deliver significant benefits to developing countries in terms of increased infrastructure investment, connectivity, and trade leading to economic development and poverty alleviation. However, private investors will only deploy their capital into infrastructure projects which they consider to be financially viable and bankable, have acceptable risk profiles, and meet certain standards.

1.11 Collaboration on infrastructure is a key pillar of the UK-China bilateral relationship and the Governments of both countries are committed to enhanced cooperation in this area. Recognising this, at the September 2015 UK-China Economic