AIIB helps accelerate sustainable infrastructure, regional connectivity: bank official

Updated 2018-04-09 09:44:24 Xinhua

The Asian Infrastructure Investment Bank (AIIB), a multilateral development bank, has helped many Asian countries have better infrastructure, deeper regional integration and accelerated poverty reduction, an AIIB official told Xinhua recently in an exclusive interview.

"We have three mandates -- sustainable infrastructure, regional connectivity and private capital mobilization... As a Chinese proverb saying, "Better roads lead to better life," Supee Teravaninthorn, Director General of AIIB's Investment Operations Department, who spoke in English but pronounced the proverb in Chinese.

Regarding regional connectivity, one of the three mandates, or the three strategic priorities of AIIB, the bank prioritizes cross-border infrastructure, ranging from roads and rails, to ports, energy pipelines and telecommunications across Central Asia, the maritime routes in South East and South Asia, and the Middle East, and beyond, she said.

Concerning sustainable infrastructure, the multilateral development bank promotes green infrastructure, and supports countries to meet their environmental and development goals.

Regarding private capital mobilization, AIIB devises innovative solutions that catalyze private capital, in partnership with other multilateral development banks, governments, private financiers and other partners, she said.

In the first year of operation in 2016, AIIB approved investment of 1.7 billion U.S. dollars for nine infrastructure projects in seven countries, including Pakistan, Bangladesh, Tajikistan, Indonesia, Myanmar, Azerbaijan and Oman, Teravaninthorn noted.

In 2017, another 2.5 billion U.S. dollars worth of investment were approved by AIIB for Egypt, Georgia, India, the Philippines, and China.

Regarding Greater Mekong Sub-region (GMS) countries, AIIB has already financed or approved or prepared funds for infrastructure projects there, including an energy efficiency improvement project in Myanmar, and an air quality improvement project in China.

"The third project (in the six-member GMS) we are about to do this year is for Laos. It is the National Road No. 13 improvement and we will allocate 40 million U.S. dollars for Laos. The next thing we are discussing to do is in Vietnam, about water resources, energy, and sustainable city development. This project could start in 2018 or 2019," the AIIB official said.

AIIB has yet to finance projects in Cambodia and Thailand, but it is considering technical assistance in the electricity sector in Cambodia, and potential projects in both private and public sectors in Thailand, including one relating to high-speed trains, she added.

AIIB directly invests in infrastructure, which indirectly helps facilitate poverty reduction. "Even though we do not really target poverty reduction, but if we invest successfully in infrastructure, it will have a trickle-down effect the poor benefit from," Teravaninthorn stated, noting that poor people can enjoy cheaper electricity charges with fewer or no blackouts if electricity infrastructure gets improved.

AIIB has helped facilitate infrastructure development and regional integration, bringing about positive direct and indirect impacts, including smoother transport and accelerated poverty reduction, in many Asian countries, but this Beijing-headquartered multilateral development bank is rumored to be dominated or controlled by China.

"A lot of people say: You are a Chinese bank, you are a Belt and Road bank, you are a Silk Road bank. No, we are none of those. The uniqueness of AIIB is that we really focus on Asia," Teravaninthorn stated.

This is the first time the major shareholders of a multilateral development bank are developing countries. "You know, the biggest shareholder (of AIIB) is China, 30 percent, India -- 10 percent," she said, noting that the major shareholders of the World Bank and the Asian Development Bank are developed countries.

"China doesn't want to borrow from AIIB, so that money can be utilized by other countries. It is very generous. I can say that it is very generous of the Chinese government," Teravaninthorn stated, adding that China has reserved the right to borrow later for only two types of projects.

"One is anything to do with climate change. Because we consider climate change is not a one-country obligation. It's a global obligation. And the second one is regional connectivity," the AIIB said.

As a Beijing-headquartered multilateral development bank operating by international standards, with a mission to improve social and economic outcomes in Asia and beyond, AIIB now counts 84 members -- rising from 57 at its commencement in January 2016.

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