PwC to work with China Development Bank on Canterbury reconstruction and investment, plus agriculture and infrastructure

The state controlled China Development Bank (CDB) could ultimately invest in and lend hundreds of millions, or even billions, of dollars to New Zealand projects and we ought to be "absolutely delighted" the likes of CDB are keen to invest in New Zealand, says the New Zealand CEO of PwC, which today revealed a "preferred relationship arrangement" with the bank.

PwC (formerly known as PricewaterhouseCoopers) has signed a Memorandum of Understanding with CDB that it says will see the two cooperate on major development projects in New Zealand with specific emphasis on reconstruction and investment in Canterbury following the devastating earthquakes there over the past year. PwC also said the two firms will work together in the areas of agriculture, infrastructure, natural resources and finance.

PwC CEO Bruce Hassall told interest.co.nz that the deal with CDB was effectively a preferred relationship arrangement. Any investment or lending CDB looked at doing in New Zealand would involve PwC providing financial advice, related professional services, providing a New Zealand perspective and PwC would also help CDB identify opportunities. He said there were a number of opportunities the two were starting to work on, but it was very early days and he declined to provide any specific details.

Christchurch visit with eye on infrastructure reconstruction

The delegation of five from CDB was in New Zealand with a particular focus on infrastructure rebuild in Christchurch and had experience of helping reconstruction in China after earthquakes. Hassall said they'd be meeting Canterbury Earthquake Recovery Authority and Christchurch City Council officials tomorrow.

More broadly, CDB could potentially invest in and lend money right across the spectrum of larger infrastructure projects.

"So if you look at Auckland, for example, they are well aware of Auckland's transport needs whether it's rail or under harbour tunnels or whatever," Hassall said. "There's a range of projects they are starting to look at and it's fair to say they are reasonably open minded across the spectrum."

"They have the ability to invest significant amounts of money. We're talking hundreds of millions, if not more. Their ability to have an involvement and participate in billion dollar opportunities? The answer would be yes," Hassall added.

CDB is already a significant investor in Australia, with last year's announcement that it would provide US$1.2 billion for a joint venture to build a new port and rail facilities at Oakajee in Western Australia, and invest in Aquila's coal and iron ore projects in the Pilbara.

'We should be delighted'

CDB is China's biggest overseas lender having made US$134.6 billion worth of foreign currency loans last year. According to its website, the bank was founded in March 1994 and is under the direct jurisdiction of the State Council. Projects CDB has helped finance include the Three Gorges Dam and Shanghai Pudong International Airport.

The Memorandum of Understanding was signed at Premier House in Wellington today by Guo Lian, the president of CDB's Shanghai Branch  and Hassall. Chinese Vice Premier Hui Liangyu and Finance Minister Bill English were also present.

PwC isn't the first New Zealand company to sign a deal with CDB. Last year ANZ New Zealand, the country's biggest bank, signed a cooperation agreement with CDB under which the two said they would aim to work together on boosting trade and investment between New Zealand and China.

(Update adds comments from interview with PwC CEO Bruce Hassall).