The $40 billion Silk Road Fund, focusing on infrastructure investment under the Belt and Road Initiative, will cooperate with Russian financial institutions in electricity and energy development projects.

The fund signed a memorandum of understanding with the Vnesheconombank, the Russian state development bank, and the Russian Direct Investment Fund on Thursday in Beijing, in the presence of President Xi Jinping and Russian President Vladimir Putin.

The two countries' financial institutions plan to jointly invest in infrastructure construction and industrial cooperation projects, especially in the electricity and energy sectors.

"The cooperation will promote the Silk Road Economic Belt and connect to the construction of the Eurasian Economic Union proposed by Russia," said a SRF statement.

"It will also strengthen bilateral trade and investment ties."

Established in Beijing in December 2014, the fund launched its first overseas investment project in April in Pakistan.

The SRF also signed an agreement with the Novatek Inc, Russia's second-largest natural gas producer, on Thursday, to purchase a 9.9 percent stake in Yamal LNG - a liquefied natural gas project at Sabetta, northeast of Russia's Yamal Peninsula.

China National Petroleum Corp has a 20 percent stake in the project, while France-based Total SA has 20 percent.

It was the fund's first investment project in Russia, and also the first investment in the natural gas industry. It will further discuss with the Novatek about stake purchase details.