The Arctic states could find much-needed funding for infrastructure improvements through China’s Belt and Road. Infrastructure is the foundation for economic development. The Arctic is extremely rich in natural resources, accounting for up to 20 percent of Earth’s reserves, while the area is sparsely populated, with only 4 million inhabitants, and with underdeveloped infrastructure.

Russia is seeing the biggest growth in infrastructure investments in the Arctic region, thanks in part to the Chinese-lead Belt and Road Initiative (BRI). The BRI is a $5 trillion plan to upgrade infrastructure between Asia and Europe — dwarfing the Marshall Plan, which spent roughly $120 billion to rebuild European infrastructure after World War II. The president of China, Xi Jinping, first introduced the plan in September 2013 during a visit to Kazakhstan. Four years later, there are 65 partner countries with a combined population of 4.4 billion and accounting for around 29 percent of global GDP. The global consulting firm PWC estimates the value of BRI capital projects and merger and acquisition (M&A) deals in seven core infrastructure sectors at just shy of $500 billion for 2016.

The first Arctic BRI project was an investment by the $40 billion Silk Road Fund for a 9.9 percent stake in the $27 billion Yamal LNG project, which is a landmark project in terms of transportation, infrastructure, and resource development in the Eurasian Arctic. Chinese companies have a combined stake of 29.9 percent in Yamal LNG, with 20 percent held by the state-owned China National Petroleum Corporation (CNPC). Remaining Yamal LNG shares are held by Russia’s Novatek (50.1 percent) and French Total (20 percent), while the project’s financing will partly come from loan agreements worth over $12 billion with Export-Import Bank of China and the China Development Bank. The Yamal LNG project represents the largest on-going Arctic commercial investment and is a large reason for why the Northern Sea Route saw record activity in transported cargo in 2016. It has also driven local infrastructure investments. The proposed $3.22 billion railway connecting Sabetta Port to the Eurasian railway network was recently awarded Russia’s infrastructure project of the year.