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InterviewsApril 1 2021

AIIB responds to Asia’s changing priorities

Asian Infrastructure Investment Bank president Jin Liqun on how the pandemic has exposed weaknesses in many economies and how the bank has shifted its priorities to tackle them. 
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Jin Liqun

Jin Liqun

Q. How has the work of the Asian Infrastructure Investment Bank (AIIB) been impacted during the pandemic? 

A: Since the outbreak of the Covid-19 pandemic, international development institutions have come together to pool their resources to navigate the health and economic upheaval caused by this crisis. AIIB has been playing its full part to rapidly respond to the financing needs of our members, in close partnership with other institutions. 

At the same time, this unusual period has required AIIB to be agile and adaptive, without compromising standards, in the way we review, assess and approve projects. This meant funding new modalities and new sectors on an emergency basis to allow us to respond swiftly to clients’ urgent needs. 

Our clients’ priorities have shifted over the past year, from traditional infrastructure investment towards investments in economic resilience, pandemic preparedness and health infrastructure. We had to shift our priorities alongside theirs so we could help them during these unprecedented times. 

Q. What has been done to support projects over the past year? 

A: We adapted to the changing needs of our clients, while adhering to our mission of promoting economic and social development in Asia. As part of the coordinated international response to the pandemic, AIIB swiftly pivoted its investment strategy and launched a $13bn Covid-19 Crisis Recovery Facility (CRF) in April 2020 to help members overcome the immediate financial pressures and maintain critical long-term investments. So far, we have approved 29 projects amounting to more than $7.5bn under the CRF to support members in navigating the challenges of such uncertain times. 

The health crisis has changed the way we work, study and live

Jin Liqun, AIIB

Also demonstrating our flexibility and agility to serve members’ needs is that, while AIIB does not have a regular instrument for policy-based financing, the bank is extending such financings on an exceptional basis. This is being done with the CRF to support its members, and through programmes co-financed with the World Bank or the Asian Development Bank. In addition, a special fund window has been set up under CRF to provide an interest rate buy-down for eligible sovereign-backed financing for lower-income members who have become particularly vulnerable to the pandemic’s impact.

Q. Has the pandemic impacted the focus of AIIB? 

A: The Covid-19 pandemic has exposed the vulnerabilities and structural weaknesses of many economies across the world. There is a popular awakening to the critical need for adequate emphasis on social infrastructure — in particular healthcare. At the same time, it is as important to consider the emerging relationship between climate change and health outcomes. The health crisis has also changed the way we work, study and live, with a heightened awareness and use of digital technology. 

The bank has identified the emerging infrastructure trends, which will be the most important drivers of infrastructure investing in the coming years. They cover green infrastructure, connectivity and regional co-operation, technology-enabled infrastructure, private sector mobilisation and social infrastructure. They will shape Asia’s post-Covid-19 recovery and reflect the need for the infrastructure sector to manage the short-term challenges of the pandemic and the global economic crisis. They are also in alignment with AIIB’s investment priorities.

AIIB will respond to the investment trends and macroeconomic shifts the world is facing by investing in the ‘Infrastructure for Tomorrow’ initiative, unlocking new capital, new technologies and new ways in which we address climate change, while connecting Asia internally and with the rest of the world. 

Q. What are the plans for the future of AIIB and the projects it supports? 

A: AIIB has recently released its Corporate Strategy for 2021–2030, which supports its mission of ‘Financing Infrastructure for Tomorrow’. It provides an anchor for the bank’s ambitions as it implements its mandate under changed circumstances. While reaffirming the foundational elements of the bank, the corporate strategy sets out clear priorities and establishes ambitious targets on AIIB’s overall share of approved financing for climate action (50% by 2025), cross-border connectivity (25–30% by 2030) and private sector operations (50% by 2030). 

The bank’s next chapter includes expanding into social infrastructure and ramping up its investments in digital infrastructure as a timely response to the medium- to long-term needs of its clients in the post-Covid era. 

Financing the Infrastructure for Tomorrow initiative is what the bank is doing to respond to the shifts going on. This is what AIIB will strive to deliver. This is green infrastructure with sustainability, innovation and connectivity — all intricately intertwined at its core. This is the most effective way to trigger growth and set the world on a greener, more sustainable and inclusive path.

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Kimberley Long is the Asia editor at The Banker. She joined from Euromoney, where she spent four years as transaction services editor. She has a BA in English Language and Literature from the University of Liverpool, and an MA in Print Journalism from the University of Sheffield. Between degrees she spent a year teaching English in Japan as part of the JET Programme.
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