Xinjiang Preparing Regional Cooperation and Integration Projects

Xinjiang Uygur Autonomous Region, People’s Republic of China, 2020-2021

Client: Asian Development Bank

Role: Financial & Financial Management Specialist

Project Background and Objectives

Xinjiang Uygur Autonomous Region plays a strategic role as China’s western gateway, linking the People’s Republic of China with Central Asia, Mongolia, and onward to Europe through key border crossings such as Alashankou and Horgos. Despite its strategic location, Xinjiang faces persistent development challenges, including high logistics costs, incomplete trade-related infrastructure, limited SME participation, and fiscal constraints at the local government level.

To address these challenges, the Asian Development Bank prepared the Xinjiang Regional Cooperation and Integration Promotion Investment Program, structured as a Multi-Tranche Financing Facility (MFF). The program aimed to improve regional connectivity, trade efficiency, and economic integration along CAREC corridors by financing transport, logistics, bonded zone, and trade facilitation infrastructure, while strengthening institutional and financial capacity at provincial and local levels.

SIET’s Role and Services

SIET participated in the project as Financial Specialist and Financial Management Specialist, providing targeted financial and investment preparation support during the PPTA phase. The scope of services included:

  • Financial and economic analysis of proposed subprojects, including logistics facilities, bonded zone infrastructure, rail-related investments, and trade facilitation assets
  • Assessment of capital cost structures, financing needs, and affordability for local governments and implementing agencies
  • Review of financial internal rate of return (FIRR) assumptions and revenue models for infrastructure investments
  • Analysis of cost recovery mechanisms, fiscal sustainability, and debt servicing capacity at municipal and prefecture levels
  • Support to the structuring of investment tranches under the MFF, aligned with project readiness and financing capacity
  • Input to financial management arrangements and implementation considerations for complex, multi-sector infrastructure investments

Outcomes and Value Added

SIET’s work focused on translating technically driven infrastructure proposals into financially credible and bankable investment packages. By rigorously reviewing financial assumptions, cost structures, and repayment capacity, the assignment helped identify key financial risks and gaps in project readiness, particularly for large logistics and trade-related facilities.

The financial analysis supported ADB and local authorities in refining project scope, phasing investments under the MFF structure, and improving alignment between infrastructure ambition and fiscal realities. This contributed to more robust investment decision-making, reduced financial risk exposure, and enhanced the long-term sustainability of regional cooperation and integration investments in Xinjiang.