(Yicai) Feb. 21 -- China’s local authorities have so far added 5,349 real estate projects to the country’s “whitelist” property financing program, with about CNY29.4 billion (USD4.1 billion) lent by commercial banks to 163 projects in 57 cities.

Some 214 local governments have sent the first batch of their listed development projects to lenders for consideration after reviews, data from the Ministry of Housing and Urban-Rural Development showed yesterday.

China kicked off the whitelist mechanism by sending the first project names to banks at the end of last month in the hope of matching loans to cash-strapped developments. Before the lunar new year holiday that began on Feb. 10, banks had issued loans worth around CNY18.1 billion to recommended projects.

“The first group of whitelist inductees in Hubei province has been announced, and the second group is under review,” Hu Jihong, an official at the National Administration of Financial Regulation's Hubei branch, told Yicai. “We’ll also prompt and supervise the implementation of the support targeting the first group of whitelist inductees.”

The projects that have so far passed muster at banks have been lent over CNY160 billion (USD22.2 billion), said Liu Shui, corporate research director at the China Index Academy. The number differs from the official figure because of the time its takes between approval and issuance, Liu added. 

But being included in the whitelist does not guarantee that projects will get funds because they still need to pass bank credit checks, Hu noted, adding that lenders decide whether to grant loans or not and how much after a comprehensive evaluation. They also cannot simply refuse to lend to non-whitelisted projects just because they fail to be included, she noted.

Sources at struggling developers told Yicai that although some of their projects have been included in the whitelist, so far only some had been cleared to refinance existing debt. “Banks are not charities!,” one source pointed out. “Whether funding is offered depends on the specific circumstances of the project, as banks need to consider their own bad debt risks.”

An executive involved in debt restructuring at one builder also told Yicai that besides changes made to the repayment arrangements for outstanding loans for one of their projects, no further projects have yet received financial support.

The executive added that investors interested in taking part in the firm’s debt restructuring are most concerned about the whitelist program. That is because if some of its projects secure such financing, the bargaining position of the builder and investors will be affected, he added.

Editors: Tang Shihua, Martin Kadiev