AIIB to explore cooperation to finance investment projects

CAI MENG/CHINA DAILY

Editor's Note: Since China put forward the proposal in 2013 that the Asian Infrastructrure Investment Bank be established, there have been speculation that AIIB will menace the existing roles of the Asian Development Bank and other international financial institutions. A prudent and cooperative approach, however, has proved to be an effective way for AIIB to achieve a solid footing on the regional and international arena.

Multilateral banks can benefit by following trend of working with development partners

For a new financial institution, no asset can be more valuable than prudence and professionalism, just as the Asian Infrastructure Investment Bank is trying to showcase.

AIIB's choice of its first batch of investment projects represented an intention to work together with, rather than to challenge, the world's existing system of multilateral development banks.

AIIB's announcement of a cofinancing project with the Asian Development Bank, a motorway in Pakistan, at first sight might offer perfect vindication of the long-held suspicion that the China-led multilateral development bank is serving as a convenient instrument for Beijing's diplomatic priorities and its "One Belt, One Road" initiative: Pakistan is a strong ally of China and the two sides are implementing a $46 billion "economic corridor" vision.

However, a closer look suggests otherwise. The Pakistan project is just one of a series of projects expected to be cofinanced by AIIB and ADB. As ADB President Takehiko Nakao said, it pops up among a flurry of projects "by chance".

In fact, the Pakistan project initially appeared on ADB's list. To accommodate AIIB, ADB revised its project's terms to allow AIIB to participate: Under its guidelines, AIIB can only fund projects open to companies from all countries, while ADB restricts participation to bidders from its member nations.

The $300 million project is still led by ADB, which will administer it on behalf of the other co-financiers: AIIB and the UK Department for International Development.

CAI MENG/CHINA DAILY