Asian Infrastructure Investment Bank (AIIB)
Country: Beijing, China
Description: The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank that aims to support the building of infrastructure in the Asia-Pacific region. The Asian Infrastructure Investment Bank (AIIB) is a new multilateral financial institution founded to bring countries together to address the daunting infrastructure needs across Asia. It commenced operations in January 2016 and has now grown to 84 approved members from around the world. According to the Articles of Agreement (AOA) of AIIB, the Bank will “provide or facilitate financing to any member, or any agency, instrumentality or political subdivision thereof, or any entity or enterprise operating in the territory of a member, as well as to international or regional agencies or entities concerned with economic development of the Asia region.” AIIB offers sovereign and non-sovereign financing for sound and sustainable projects in energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, and urban development and logistics. AIIB identifies the following three topics as their priorities: Sustainable Infrastructure: promoting green infrastructure and supporting countries to meet their environmental and development goals. Cross-country Connectivity: prioritising cross-border infrastructure, ranging from roads and rail, to ports, energy pipelines and telecoms across Central Asia, and the maritime routes in South East and South Asia, and the Middle East, and beyond. Private Capital Mobilization: devising innovative solutions that catalyse private capital, in partnership with other MDBs, governments, private financiers and other partners. In June 2017 AIIB has developed Sustainable Energy for Asia Strategy which sets a clear framework for AIIB to invest in energy projects that will increase access to clean, safe and reliable electricity for millions of people in Asia. To implement the strategy, the Bank will support its members to do their part in fighting climate change as expressed in the Paris Agreement. Initially, AIIB will focus on projects in renewable energy, energy efficiency, rehabilitation and upgrading of existing plants, and transmission and distribution networks. Funding type AIIB main financial support vehicles are sovereign and non-sovereign loans. The AIIB Project Preparation Special Fund (“Fund”) also provides grants to support and facilitate the preparation of projects to be financed by AIIB in eligible member countries (International Development Association recipients, including International Development Association Blend countries.) In exceptional circumstances, Fund resources may also be used for preparing innovative/complex projects, regional/cross-border projects that have significant regional impact and benefit other members, or non-sovereign backed transactions where there is a demonstrable need. Project cycle AIIB’s project process is guided by its strategic goals and thematic priorities: sustainable infrastructure, cross country connectivity and private capital mobilization. AIIB screens project ideas and proposals from clients, partners and other stakeholders and seeks to achieve an appropriate balance among borrowers, sectors, sovereign and non-sovereign projects. Projects that meet the preliminary screening criteria are included in the rolling investment program. A brief description on main steps in project preparation and implementation are presented in the Box below. AIIB Project cycle Step 1. Strategic programming AIIB reviews project ideas and proposals from clients, partners and other stakeholders and seeks to achieve an appropriate balance among borrowers, sectors, sovereign and non-sovereign projects. Projects that meet the preliminary screening criteria are included in the rolling investment program which will be discussed and approved by the Executive Committee on a regular basis. Step 2. Project Identification As part of the Project Identification phase, the prospective borrower submits documentation pertaining to the proposed project. This documentation may include a brief project summary and/or a preliminary or final feasibility report. Following a review of the information received, AIIB may request that additional research be conducted to facilitate a more thorough assessment of the proposed project. Step 3. Project Preparation During this phase, AIIB’s project team and the borrower’s designated agency/agencies will work closely together on project design. In addition, AIIB’s project team will make an assessment on the borrower’s initial due diligence documents and will work with the borrower’s designated agency/agencies to address any identified gaps. Following the project appraisal, the AIIB project team will prepare a Project Document that will include the project objective/impact, rationale, project components, estimated cost, financing plan, implementation arrangement and schedule, project risks and mitigation measures, and any project covenants that were agreed to. Step 4. Board Approval After negotiations with the Borrower, the Project Document is submitted to the AIIB Board. Following the Board approval, the Project Document is posted on AIIB’s website with the Borrower’s consent. After Board approval, the Borrower’s representative and AIIB’s Vice President and Chief Investment Officer sign the loan and project agreements at a mutually agreed date. The loan becomes effective only after fulfilling the respective loan effectiveness conditions, if any, and the legal requirements (legal opinion etc.). Step 5. Project Implementation AIIB focuses on project readiness during the project preparation stage to avoid project start-up implementation delays. This preparation stage includes: procurement readiness and implementation readiness. The Borrower’s Project Implementation Office is responsible to implement the project according to the predefined project plan. Step 6. Project Completion and Evaluation AIIB furnishes a project completion report within 6-12 months after project completion. The AIIB team prepares a Project Completion Report (PCR) on the Project’s results, the performance by the Project Participants and AIIB, and the degree of achievement of the Project’s development objectives. Contact details AIIB Headquarters: B-9 Financial Street, Xicheng District, Beijing 100033, P.R. China, Tel: +86 10 8358 0000. https://www.aiib.org/en/index.html Information requests: Mail: B-9 Financial Street, Xicheng District, Beijing 100033, China Fax: +86 10 83580005 Email: email@example.com.