China's engineering, procurement and construction (EPC) industry is expected to play a bigger role in the "Belt and Road" initiative, despite multiple challenges companies face in the expansion of overseas markets, a forum in Beijing was told on Friday.
Emerging countries have strong demand for clean energy and infrastructure construction while Chinese EPC providers benefit from the initiative, which highlights infrastructure connectivity, according to speakers at the EPC forum. However, Chinese EPC companies face tougher requirements from project owners in terms of engineering design, international technical standards and funding.
"We've been noticing that, for some countries, infrastructure investment has been a cornerstone of their economic growth," said Liu Jingsheng, managing director at investment bank China International Capital Corp.
Though many countries are facing an economic slowdown, global demand for infrastructure construction remains strong, especially in emerging countries as well as those included in the "Belt and Road" initiative, according to the speakers at the forum. "The initiative not only provides Chinese EPC firms more opportunities overseas but also pushes them to upgrade their business models and operating systems," said Yan Zhiyong, chairman of the Power Construction Corp of China.
In the modern EPC industry, the "engineering" part not only stands for providing a project's design but also a package of solutions for a country, with the aim of sustainable development that is part of the "Belt and Road" initiative, Yan noted.
In terms of funding, Liu said that as EPC projects usually have long lives, project financing should be more market-oriented. Many EPC projects are still largely funded by bank loans, but more diverse and innovative financing models should be introduced into the EPC industry in the near future, she noted.
