AIIB to build a sustainable tomorrow for future generations

JEJU ISLAND - The 18-month-old Asian Infrastructure Investment Bank (AIIB) has won acclaim for its good work from representatives of all over the world at its Second Annual Meeting of the Board of Governors held through Saturday.

The multilateral development bank (MDB), initiated by China and supported by a wide range of countries and regions, has been playing a unique role in promoting development while showing great creativity and potential.

Promises delivered

"In January 2016, at the Bank's inauguration, I made a pledge that we would ensure that this institution operates as a 'lean, clean and green' organization," said Jin Liqun, president of AIIB.

"Eighteen months on, I can report to you that the management and the staff have been translating these principles and aspirations into reality," he said.

To date, AIIB has approved some $2.49 billion in financing for 16 infrastructure projects in nine countries. Twelve of the projects were co-financed, while four were standalone projects prepared by the bank.

Jin made particular reference to the power transmission project in Bangladesh, which will help bring affordable and reliable electricity to more than 12 million rural people while achieving energy saving equivalent to an annual reduction of 16,400 tons of CO2.

"This project demonstrates the AIIB's commitment to development, to helping the world's underprivileged and to the environment," he said.

The bank has also approved three new members - Argentina, Madagascar and Tonga during the annual meeting, bringing the total membership to 80.

"Broad support from both our regional and non-regional membership manifests a firm confidence in AIIB."

"We appreciate very much the way the bank has begun. We are pretty confident that in the future years, the bank would expand its membership and also its portfolio for the good of this region," said Philippe Baudry, director-general of the Treasury of France.

"The bank has done a lot. Given to its young age, I would give it a good score of more than 90 points out of 100," said Hamad Albazai, deputy finance minister of Saudi Arabia.

Forging new path

"AIIB is now the only multilateral development bank in the world that the developing countries dominate with a combined total of over 60 percent of the shares. It has been playing a unique role in global governance," said Zheng Quan, director general for Policy and Strategy of AIIB.

For Sir Danny Alexander, vice president and corporate secretary at AIIB, the charm of AIIB lies in its mission to invest in infrastructure, which supports sustainable economic development in Asia and is also good for the whole world as Asia has the most people in the world, most of economic growth in the world and also a lot of growth potential.

According to Zheng, part of the bank's charm also comes from its forging a new path, including providing financing to both sovereignty-backed and non-sovereignty backed infrastructure projects, and investing in countries across all income levels which gives the bank more flexibility.

The bank has also established a non-resident board, which, while giving the board more autonomy and responsibility, is more cost-efficient, according to Zheng.

The new mechanism and business models are based on learning from the experiences and lessons of other multilateral development banks.

"We are quickly moving upwards on the learning curve," said Jin.

Jin also stressed that AIIB, as the "newest member of the family of multilateral financial institutions and development banks," has been working with its "sister MDBs."

"AIIB is an important multilateral development bank as it tries to fill the gap between demand and supply in infrastructure and to mobilize more money from the private sector to promote sustainable growth in Asia," said Tadashi Yokoyama, head of External Representation Office for Asia of the African Development Bank.

"We are looking forward to working with AIIB to co-finance good projects in the African continent," said Yokoyama.

To build a better future

AIIB, while winning acclaim from all over the world for its good work and potential, is also conscious that it still has a long way to go.

The annual meeting of the Board of Governors is AIIB's supreme decision-making body in which chief delegates of members discuss directions and make major decisions on the bank's management.

This year's meeting, with the theme "Sustainable Infrastructure," saw the release of the bank's strategy in the energy area, which voiced strong support for its members to transit toward a low-carbon future.

"We are committed to the principles of sustainable development in the conceptualization, design, and implementation of our investments," Jin said at the annual meeting.

Other strategic focuses of the bank include promoting cross-country connectivity and mobilizing more money from the private sector.

The bank announced on Thursday three new projects, including its first equity investment, which, according to D.J. Pandian, vice president and chief investment officer of AIIB, is another significant milestone and will enhance the bank's potential to source and fund high quality, private sector projects.

"We will realize our grand vision of a future of shared benefits across Asia and beyond. We have every reason to be optimistic about our ability to accomplish what we have set as our goals," said Jin.