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AIIB to invest $20 billion in five years

The Asian Infrastructure Investment Bank (AIIB) will double its lending to $2.5 billion over the next year and will lend $20 billion in five years, IJ Global has reported. 19 Jun 2017

Almost all of this lending will be in co-financing arrangements with other banks, a source told IJGlobal at the bank's annual meeting.

The bank will not fund any coal-fired projects and as a business choice for the near future will avoid health and education infrastructure projects. It will also follow World Bank rules on procurement and environmental standards, IJGlobal reported.

The AIIB is in talks with the three major credit rating agencies and should obtain credit ratings by the end of this year, the news site said.

The AIIB was announced in Beijing in 2014 with the aim of boosting investment in infrastructure in Asia and was established formally by 57 member countries that signed the Articles of Agreement in June 2015. It is financed by individual country contributions proportionate to their economic size.

Infrastructure expert Ellen Zhang of Pinsent Masons, the law firm behind Out-Law.com, was also at the AIIB meeting.

"The feeling at the meeting was that there is no lack of liquidity in the Asian market, but too few investors are prepared to invest equity in the infrastructure market. Asian governments will have to use PPP (public-private partnership) models to attract private capital into the sector," Zhang said.

"Everyone is looking to the AIIB to solve long-standing problems, but the bank is still in the process of shaping its capacity and in my view it will be more focussed on working with other multilaterals in the short term for deals," Zhang said.

The AIIB's current focus is on economic infrastructure such as energy and renewables, and transport, rather than social infrastructure, Zhang said. 

Recent Infrastructure Experience