AIIB (Asian Infrastructure Investment Bank) news

[ahojunk]

Australia wants AIIB to invest in coal power
JANNE SUOKAS
2016/12/16

Australia hopes to secure its lucrative coal exports to countries in Asia. (Photo: OZinOH, Flickr)


Australia is reportedly lobbying hard for the China-led Asian Infrastructure Investment Bank (AIIB) to invest in coal power projects in Asian countries.

The newly-established development bank is currently drafting its energy strategy and the prospect that coal could be excluded from its priorities has alarmed both the Australian government and the country’s powerful coal lobbies, the Financial Times reported on Friday.

Australia accounts for around one-third of all coal trade in the world, with most of its coal exports going to China, Japan, South Korea and other countries in the region.

“The [Australian] government wants the AIIB energy strategy to acknowledge that fossil fuels will play a significant role in energy generation in the region for decades to come,” Kate Williams, spokeswoman for Australia’s Treasury Department, told Financial Times (paywall).

China launched the AIIB as “clean, lean and green” lender to finance infrastructure projects across Asia and the bank started operations in January with 57 member countries and US$100 billion in committed capital.


Focus on energy efficiency

The AIIB launched the first round of consultations in October for its energy strategy, which will be approved by the bank’s board in their annual meeting next June.

The bank’s first draft guidelines on the energy strategy published in October said Asia needs US$8,740 billion of energy investment by 2025 to implement already announced policies.

The paper said fossil fuel production has “severe negative impact” on densely populated cities in Asia and instead prioritised the upgrading of existing energy infrastructure to raise efficiency as well as investment in renewable energy.

But while it proposed that the AIIB would not consider financing nuclear plants at this stage, the paper did not completely close the door on coal and oil.

“Coal- and oil-fired power plants would exceptionally be considered if cleaner technologies are not available for well-founded energy security or affordability reasons,” the paper said.

The proposal is in line with policy practices of other lenders such as the Japanese-led Asian Development Bank (ADB) and the European Bank for Reconstruction and Development which in some cases have funded coal power projects.

But according to the Financial Times, the AIIB paper still raised sharp criticism from the Minerals Council of Australia, an industry lobby, which said economic development should “not be subordinated to climate policy objectives”.


Three approved power projects

The AIIB has so far approved eight loans worth US$1.13 billion in total to six projects in Asian countries including Bangladesh, Pakistan and Tajikistan and two projects in Oman, the bank’s first in the Arabian Peninsula.

Three of the approved projects are in the energy sector, including a hydropower extension project in Pakistan, a gas-fired power plant in Myanmar and a power grid upgrade in Bangladesh.

But Indonesia has said it hopes the AIIB – in contrast to the ADB and the World Bank – will finance major coal-power projects in the country.

Australia is the sixth largest member country in the AIIB with a US$3.7 billion stake and 3.8 percent of votes.

China is the largest member country with a USA$29.8 billion stake and 28.7 percent of voting power, followed by India, Russia, Germany and South Korea.

 

[ahojunk]

AIIB to co-fund EDSA BRT, Manila flood control – DOF

Published December 19, 2016 12:38pm

The EDSA Bus Rapid Transit system and the Metro Manila Flood Management Project are the first two projects the Asian Infrastructure Investment Bank (AIIB) will co-finance, the Department of Finance (DOF) said Monday.

"AIIB President Jin Liqun confirmed that the initial two projects that the AIIB will co-finance in the Philippines, with other multilateral lending institutions, are the Metro Manila Flood Management Project and the EDSA Bus Rapid Transit system," the DOF said in an emailed statement.

The department earlier said both projects are the most prepared in terms of government approvals and feasibility studies.

The P37.76-billion EDSA Bus Rapid Transit system is also co-financed by the Manila-based Asian Development Bank.

"We are all very eager to finalize the infrastructure projects in your country ... This time, we are very happy we can really talk about something to do in your country," Jin was quoted as saying in a recent meeting with Philippine officials.

The EDSA BRT of the Department of Transportation is a bus system along the 48.6-kilometer Epifanio delos Santos Avenue, from Monumento in Caloocan City to Diosdado Macapagal Avenue that straddles the cities of Pasay and Parañaque.

It entails integrated routes between the Ortigas Business District, Bonifacio Global City and Makati Business District.

A project of the Department of Public Works and Highways and Metro Manila Development Authority, the P23.5-billion Metro Manila Flood Management is envisioned to improve 36 pumping stations in Makati, Malabon, Manila, Pasay, and Taguig.

It entails the construction of 20 new pumping stations in Caloocan, Mandaluyong, Manila, Pasay, Pasig, Quezon, San Juan, and Valenzuela.

The projects have been approved by the National Economic and Development Authority Board.

During the meeting, the AIIB noted the speed with which the Senate ratified the Philippine membership in the bank, which was finalized on December 5.

"We'd like to thank you very much for speeding up the ratification so that we can start very soon. We believe there are so many that we can do in your country," Jin said.

The government plans to spend P8.2 trillion on infrastructure development in the six years to 2022, and dubbed the period as the "golden age of infrastructure." — Jon Viktor Cabuenas/VS, GMA News

- See more at: http://www.gmanetwork.com/news/stor...manila-flood-control-dof#sthash.FSi8UwfF.dpuf

 

[TaiShang]

The EDSA Bus Rapid Transit system and the Metro Manila Flood Management Project are the first two projects the Asian Infrastructure Investment Bank (AIIB) will co-finance, the Department of Finance (DOF) said Monday.

"AIIB President Jin Liqun confirmed that the initial two projects that the AIIB will co-finance in the Philippines, with other multilateral lending institutions, are the Metro Manila Flood Management Project and the EDSA Bus Rapid Transit system," the DOF said in an emailed statement.

This is the way for Mr. Duterte to fight poverty and crime; long term solution.

I am happy to see that AIIB is now quite focused on South East Asia, which needs the lion share of infrastructure investment according to the ADB.

AIIB and ADB can have a great synergy in working in SEA. ADB has a long history and experience in the region.

@Pinoy

 

[TaiShang]

AIIB approves 600 mln USD loan for Azerbaijan
Xinhua, December 22, 2016

The Asian Infrastructure Investment Bank (AIIB) has approved a loan of 600 million U.S. dollars, its largest so far, to finance an energy project in Azerbaijan.

The decision was made by the AIIB's Board of Directors on Wednesday, the bank announced Thursday.

The bank approved its first four loans, totalling 509 million dollars, in June. Three of the four loans are co-financing projects with multilateral development bank partners.

The AIIB, a China-initiated multilateral bank, was founded on Dec. 25, 2015.

 

[ahojunk]

AIIB and World Bank lend big to TANAP project
ASIA / 03-01-17 / BY FINBARR BERMINGHAM

The Asian Infrastructure Investment Bank (AIIB) and World Bank rounded off 2016 with huge loans to the Trans-Anatolian gas pipeline (TANAP) project, part of the gas corridor connecting Azerbaijan with Europe.

In the days before Christmas, the AIIB gave its approval to a US$600mn loan to be used in the project’s construction, while the World Bank pledged US$800mn.

The 1,850km pipeline will be operated by the Azerbaijan Southern Gas Corridor (SGC), the main borrower – although 50% of the World Bank’s portion will go to the Turkish state-owned energy company BOTAS, which holds a 30% stake in the project. This portion is guaranteed by the Turkish government.

The TANAP will travel through Turkey and eventually connect to the planned Trans-Adriatic Pipeline (TAP), bringing natural gas to Europe via Greece, Albania and Italy. It will have a total cost of US$11.7bn.

There will be substantial equity finance, but around US$4bn is expected to come in external debt. A big portion of the finance will likely come from multilateral lenders, with the European development banks expected to come into play soon.

The European Commission has billed TANAP as the “biggest infrastructure project of our times”, clearly looking to Azerbaijan’s Shaz Deniz II gas-field in the Caspian Sea as a means of replacing the energy supply lost to sanctions the EU placed on Russia.

The European Bank for Reconstruction and Development (EBRD) is expected to provide a syndicated loan of €1.5bn to TAP and another large loan to TANAP. The European Investment Bank (EIB) and the Multilateral Investment Guarantee Agency (Miga) are likely to be involved too.

The AIIB’s debt is guaranteed by the Azeri government, which through its State Oil Company of Azerbaijan (SOCAR) holds a 58% share in the project. The loans take the AIIB’s book to more than US$1.7bn in its first year of operation.

“The approval of TANAP, which involves a number of other multilateral and private sector players, demonstrates the bank’s capacity to assess and provide loans in even the most complex of cases.

“This crucial upgrade of energy infrastructure between Asia and Europe will further strengthen the economy of Azerbaijan while underpinning energy security in Turkey, as well as several countries in southern Europe,” says DJ Pandian, the AIIB’s chief investment officer.

The World Bank’s vice-president for Europe and Central Asia Cyril Muller adds: “TANAP will not only boost competitiveness and create economic opportunities for people in Azerbaijan and Turkey, it will also support regional trade, improve connectivity, and support energy security in Turkey and in Europe.”

 

[TaiShang]

The European Commission has billed TANAP as the “biggest infrastructure project of our times”, clearly looking to Azerbaijan’s Shaz Deniz II gas-field in the Caspian Sea as a means of replacing the energy supply lost to sanctions the EU placed on Russia.

Interesting that the AIIB has chosen to contribute to the project. Russia must not be too much worried about it otherwise the AIIB would certainly not participate.

 

[Daniel808]

MONDAY, 02 JANUARY, 2017 | 07:40 WIB
AIIB to Finance Three Indonesian Projects

Russia's delegate prepares to sign the articles of agreement of the Asian Infrastructure Investment Bank (AIIB) at the Great Hall of the People, in Beijing, June 29, 2015. China will hold a 30.34 percent stake in the Asian Infrastructure Investment Bank (AIIB), the Finance Ministry said on Monday, making Beijing the largest shareholder in a bank that is expected to project the country's growing influence. REUTERS/Jason Lee



TEMPO.CO, Jakarta - The Asian Infrastructure Investment Bank (AIIB) will finance three potential projects in Indonesia, namely Sumatra toll road, power plants, and dam maintenance and operation. “It’s been planned,” AIIB vice president Luky Eko Wuryanto told Tempo last week.

Lucky said that the AIIB has held talks with the government on the amount of financing. The funds to finance dam operations and Java 7 power plants are readily available this year. “[The fund for] Sumatra toll road [project] will be disbursed by 2018.”

The AIIB had earlier disbursed US$216 million (Rp2.8 trillion) to finance development of slum areas and US$100 million (Rp1.3 trillion) for regional infrastructure development.

Operation and maintenance of dams will cost US$300 (Rp4 trillion), whereas the projects of the toll road and power plant construction will cost US7.5 billion (Rp100 trillion) and US$1.8 billion (Rp23.4 trillion).

Luki said that the AIIB will open a representative office in Indonesia to finance potential government projects included in the Blue Book.

Basah Hernowo, Director for Financing System and Procedures, the National Development Planning Agency, said that foreign loans are the easiest solution to funding development projects. Indonesia can only generate Rp1,978.6 trillion from Rp4,796.2 trillion needed for development projects in the next five years.
ANDI IBNU

http://en.tempo.co/read/news/2017/01/02/056831789/AIIB-to-Finance-Three-Indonesian-Projects

Thanks AIIB-Asian Infrastructure Investment Bank for your help to support Indonesia's Development

 

[Echo_419]

This is the way for Mr. Duterte to fight poverty and crime; long term solution.

I am happy to see that AIIB is now quite focused on South East Asia, which needs the lion share of infrastructure investment according to the ADB.

AIIB and ADB can have a great synergy in working in SEA. ADB has a long history and experience in the region.

@Pinoy

I think its South Asia which needs the lion share of Infra investment

 

[TaiShang]

I think its South Asia which needs the lion share of Infra investment

Interesting that both WB and ADB have been providing development assistance to the region for five decades or more. But, the result is less than extraordinary.

Either the region really needs much more than what the existing development schemes can provide.

Or the management and allocation of resources by the WB and ADB has been less than efficient.

I would like to assume the first to be the case because the AIIB is supposed to learn from the "standards" established by the WB and ADB.

 

[Echo_419]

Interesting that both WB and ADB have been providing development assistance to the region for five decades or more. But, the result is less than extraordinary.

Either the region really needs much more than what the existing development schemes can provide.

Or the management and allocation of resources by the WB and ADB has been less than efficient.

I would like to assume the first to be the case because the AIIB is supposed to learn from the "standards" established by the WB and ADB.

I would say 50-50 of both

 

[AndrewJin]

Interesting that both WB and ADB have been providing development assistance to the region for five decades or more. But, the result is less than extraordinary.

Either the region really needs much more than what the existing development schemes can provide.

Or the management and allocation of resources by the WB and ADB has been less than efficient.

I would like to assume the first to be the case because the AIIB is supposed to learn from the "standards" established by the WB and ADB.

World Bank has invested in many HSRs in China, interesting.....
They have written numerous reports about how successful their investments were....
Happy passengers, closer regional integration, more efficient movement....

 

[TaiShang]

AIIB President: Door will remain open for U.S. to join
China Daily, January 16, 2017

One year after opening with 57 charter members, the China-led Asian Infrastructure Investment Bank would still welcome the US to join its ranks, the bank's president Jin Liqun has said.

"The door will remain open," Jin said in a television interview, when asked whether he expected the US to reconsider becoming a member.

He said: "We maintain a consistent policy. The AIIB is a multilateral development institution."

Approximately 30 economies are waiting to join, Jin said at the bank's headquarters in Beijing. The lender, with $100 billion of pledged capital－part of China's push to expand the nation's economic benefits to others, backed nine projects in seven countries last year.

Before it opened in January 2016, US President Barack Obama rejected joining, only to see several of its closest allies sign up. Now Beijing is preparing for the incoming US administration of Donald Trump, who's already straining ties before taking office on Jan 20.

Jin, a former deputy finance minister who also has worked at the World Bank and the Asian Development Bank on China's behalf, is still optimistic despite recent tensions.

He said: "We can work very well together."

He added that senior officials in the US government, including both Democrats and Republicans, have shared with him their praise for the new institution.

He said: "I'm encouraged by the very positive comments on the AIIB."

The AIIB got a boost last year when the UK, Germany, France and Italy became members. Other US allies such as Australia, South Korea and Canada also joined, leaving the US and Japan as the only nations to hold off joining.

The AIIB's inaugural projects ranged from a slum upgrading project in Indonesia to a new pipeline linking gas fields in Azerbaijan to markets in southern Europe, via Turkey.

The bank lent $1.73 billion in 2016, exceeding an earlier target of $1.2 billion. Jin said 75 percent of the bank's projects so far are proposed and co-financed with existing lenders, including the Washington-based World Bank, Manila-based ADB and London-based European Bank for Reconstruction and Development, while AIIB staff selected the remainder.

The AIIB will continue to collaborate closely with those other multilateral lenders while beefing up its own capability and working to increase its disbursements, according to Jin.

"The pipeline is getting bigger," and the bank's priority is to "have a better balance across the regions, countries and sectors," he said.

Jin, one of the first postgraduate students to study English literature after China's cultural revolution (1966－76), is fluent in English and French and translated The House of Morgan, a book on the JP Morgan empire by US author Ron Chernow, into Chinese in 1996. He also served as supervisory chairman of the country's sovereign wealth fund.

Now, he said, he's confident the country's economy will fare well during its transition to new drivers of growth.

He said: "China is faced with a number of challenges, particularly restructuring the economy, moving from excessive dependence on external sectors to domestic consumption, and improving the efficiency of the Chinese economy, not aiming at simply the numbers of the growth."

Factories and services activities capped a year of strengthening across several indicators. But under the hood, risks remain: Increasing pressure on the yuan, rising capital outflows and concern Trump may make good on threats of punitive measures against China's exports.

Foreign reserves fell for a sixth month in December, bringing the 2016 drop to $320 billion. The government has recently announced new measures, including extra requirements for citizens converting yuan into foreign currencies.

Jin said: "Some measure to address this issue in my view probably is necessary. I hope things would stabilize very soon, and panicking on part of investors would disappear." He said the global economic outlook this year is more positive than last year.

"If you look at the short-term cyclical recovery, and long-term trend, these two factors seem to be doing pretty well," Jin said.

"That would in my view favor infrastructure investment both in emerging market economies and in developed countries, which in turn will help sustain growth. It is gratifying to learn that even in the US, they would like to spend more money on infrastructure."

 

[TaiShang]

AIIB’s first year shows efficiency

(Global Times) 10:01, January 17, 2017

The first China-initiated multilateral bank has approved funding for more projects than expected just one year after it was launched, a demonstration of China's capability to reshape existing international financial institutions, experts said.

Since the launch of the Asian Infrastructure Investment Bank (AIIB) in Beijing on January 16, 2016, 57 countries have signed up as members, including 37 in Asia and 20 non-regional countries.

So far the bank has approved nine projects totaling $1.73 billion, according to an e-mail the bank sent to the Global Times late Sunday night. The projects are intended to promote green infrastructure and have also prioritized cross-border projects ranging from roads to energy pipelines across Asia.

Usually an infrastructure project funded by the World Bank (WB) or the Asia Development Bank (ADB) takes three to five years from proposal to approval, but the AIIB has signed off on more than expected, which reflects its efficiency, said Zhou Qiangwu, director general of the International Economics and Finance Institute, a think tank under the Ministry of Finance.

Three of these projects were financed by the AIIB itself, while the other six are conducted along with other multilateral development banks (MDBs). The AIIB has signed co-financing framework agreements with MDBs such as the WB, ADB and European Bank for Reconstruction and Development (EBRD), with the aim of looking for more financing channels for the projects.

"Broad cooperation with other international institutions gave the AIIB various financing channels and this helped it to become efficient," said Zhang Jianping, director general of center for regional cooperation of Chinese Academy of International Trade and Economic Cooperation.

The WB and the ADB had been working on some projects but lacked capital support, and the AIIB was able to join them.

"In addition, without a permanent board of directors, there is less bureaucracy in decision-making procedures," Zhang said, compared with other MDBs.

The AIIB will focus on scaling up support to clients, bolstering financial sustainability and continuing to pave the way for market access.

The bank is expected to improve the implementation of its policies, and continue to recruit more talented staff in 2017, Zhou noted. "Also, it will set out to solve issues faced by other MDBs including the disclosure of information and communication with the public in particular," he said, predicting that the financing scale this year will be surely larger than 2016.

Zhang said the AIIB may consider more projects along the One Belt and One Road initiative in the new year.

In terms of introducing new members, experts said the China-initiated bank always holds an open attitude toward potential US membership under the upcoming Trump presidency, "but the US' high debt ratio and anti-China sentiment in the cabinet make it unlikely," Zhang said.

The first year of operations shows that China, as one of the biggest shareholders, is playing the constructive role in the bank's governance structure, and is capable of working well with other shareholders and the management of the AIIB for a lean, clean and green institution, Zhou noted.

"The AIIB's high efficiency exerts pressure on existing international institutions like the ADB and the WB to institute further reforms," he said.

***

This year we may witness the organic integration of the AIIB into the OBOR framework.

 

[ahojunk]

AIIB unveils 2017 priorities
2017-01-17 08:20 | Xinhua | Editor: Gu Liping

The Asian Infrastructure Investment Bank (AIIB) on Monday released its strategic priorities for the year ahead.

The multilateral development bank will focus on three major areas this year -- sustainable infrastructure, cross-country connectivity and the mobilization of private capital, according to a statement on its website.

In a bid to promote sustainable infrastructure, AIIB will promote green infrastructure and support countries to meet their environmental and development goals.

It will prioritize cross-border infrastructure, including roads, rail, ports and energy and telecommunications facilities across Asia and beyond to increase connectivity among countries, the statement said.

AIIB will also devise innovative solutions that catalyze private capital together with other multilateral development banks, governments and private financiers.

AIIB's core mission is to promote Asia's social and economic development by investing in projects that will connect people, services and markets, said AIIB president Jin Liqun.

"We have a strong pipeline of projects in 2017 that will prioritize green infrastructure investment, promote energy efficiency, renewables, clean transport and other projects that help address global warming," Jin said.

Since opening on Jan. 16, 2016, AIIB has welcomed 57 signatory countries and approved loans of 1.73 billion U.S. dollars to support nine infrastructure projects in seven countries.
.

 

[ahojunk]

AIIB to add 25 new member countries in 2017
JANNE SUOKAS
2017/01/24

The Chinese-led Asian Infrastructure Investment Bank expects to add about 25 new member countries this year. (Photo: China News Service)

Ireland, Canada, Ethiopia and Sudan are reportedly among around 25 countries from across the world that are expected to join the Asian Infrastructure Investment Bank (AIIB) this year.

China established the AIIB to finance energy, transport and other infrastructure projects in Asia, and the bank started operations a year ago with 57 member countries and US$100 billion in capital.

The Beijing-based bank is expected to add a wave of new members at its second annual meeting in June.

“We have applications from a number of Europeans who didn’t join in the first wave, some Asian countries, South Americans and Canada has applied to join,” Sir Danny Alexander, vice-president of the AIIB, told the Financial Times (paywall) on Tuesday. “So this year the membership will expand quite substantially.”

The United States and Japan are the only major countries yet to join the bank, which is regarded as an alternative source of financing to the Washington-based World Bank and the Japanese-led Asian Development Bank.

Several US allies, including the United Kingdom, Australia and South Korea, rushed to join the AIIB in the first wave despite Washington’s initial opposition.

Hungary and Romania are among European countries that have since sought membership in the bank, as well as Ethiopia and Sudan from Africa. Hong Kong, which is a special administrative region of China, is expected to join as the bank’s first “sub-sovereign” member.

The expansion will change the voting rights in the AIIB, possibly removing China’s veto power over key decisions that require three-fourths majority votes.

China is the largest member country with 28.69 percent of voting power, followed by India (8.28 percent), Russia (6.53 percent), Germany (4.57 percent), and South Korea (3.86 percent).

Expanded membership to boost lending

AIIB President Jin Liqun said in his interview with the Financial Times now that China had developed it was “our turn to contribute” to the world.

“China needs to do something that can help it be recognised as a responsible leader,” he said.

Jin’s statement comes after Chinese President Xi Jinping defended globalisation at the World Economic Forum meeting in Davos last week, just before the new US President Donald Trump took office after winning the White House on an overtly protectionist trade agenda.

The AIIB chief also said in the interview that adding a host of new members would help boost the bank’s lending capacity.

After approving nine loans worth US$1.73 billion for projects in countries including Azerbaijan, Indonesia and Tajikistan last year, the AIIB said last week it intends to finance 10-15 projects worth US$2.5 billion during its second year of operation.

The focus would be on promoting sustainable infrastructure and cross-border links, as well as mobilising private capital to fund development projects in Asia.

The cautious lending target however reflects the fact that the AIIB is still in the process of recruiting staff and drafting its policies, including the bank’s much-awaited energy strategy.

The Chinese-led lender also expects to be assessed by international credit rating agencies this year.

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