AIIB makes quick rise to global prominence

Jin Liqun, president of AIIB. [Photo/Xinhua]

Board approves first four loans totaling $509 million; other economies lining up to become members

The China-led Asian Infrastructure Investment Bank is stepping up to play a more significant role in the global financial landscape, with the first batch of projects approved and more members expected to join.

In a speech at a meeting of the bank's leaders on Saturday, AIIB President Jin Liqun said that with a strong start, the bank is poised to play an expanded role worldwide.

What has been achieved in the half-year since the bank was established has been "fast-paced and productive", Jin said.

Aiming to support infrastructure projects with significant cross-border benefits, the bank opened in January this year and attracted 57 founding members.

A total of 24 economies have shown a desire to join the institution, with Hong Kong expected to join by year's end, Jin said.

With priority given to sound green infrastructure investments, Jin said the bank will strive to bring good value in its lending and is poised to meet or exceed its target of $1.2 billion this year.

Board members approved the bank's first four loans totaling $509 million for electrical power, transportation and urban development in Bangladesh, Indonesia, Pakistan and Tajikistan.

Three of the four projects are being cofinanced by the Asian Development Bank, the European Bank for Reconstruction and Development and the World Bank.

"The bank is fulfilling its commitment by helping members, especially the low- and middle-income member countries, to strengthen their capacity, including environmental, social, legal, procurement and technical assessments and analyses, and advisory services," said Deputy Minister of Finance Shi Yaobin, referring to the initial $50 million startup contribution.

Zhang Yansheng, director of the Institute for International Economics Research of the National Development and Reform Commission, highlighted the role that the AIIB should play to smooth out any volatility and uncertainty in the global economy.

"Infrastructure projects, including cross-border and within other countries, is quite a significant method to motivate growth at a time when the global economy is reviving slowly," Zhang said.

Axel van Trotsenburg, vice-president of development finance at the World Bank, said that "with a clear and specific mission, the AIIB has its role to play in the future to fill the funding gap for infrastructure that all multilateral banks can hardly fill in the short run". Trotsenburg, added that the bank is able to expand financing channels to invite more private-sector players to cofinance projects.

Minister of Finance Lou Jiwei said pension funds and other forms of private investment can also join the investment portfolio of AIIB.

"Investment in the private sector can join through a public-private partnership funding model," Lou said.