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AllAfrica
2 days ago
- Business
- AllAfrica
China's AIIB isn't too young to act and invest responsibly
In June 2025, the Asian Infrastructure Investment Bank (AIIB) marked its tenth anniversary at its annual meeting. Outgoing president Jin Liqun gave opening remarks, invoking Chinese President Xi's original vision of the Bank to become a true multilateral institution and celebrating its commitment to 'integrity, transparency, inclusiveness, and a results-oriented approach.' Unfortunately, the bank's track record reveals a different story. As representatives of Accountability Counsel, we attended the same meeting to advocate for the Bank to be more responsible when its financing contributes to negative impacts on local communities. In particular, we called for much-needed reforms to the AIIB's accountability mechanism, called the Project-Affected People's Mechanism, so that the AIIB can easily hear directly from local communities and facilitate action to either prevent or remediate harm. The AIIB's project financing has been linked to involuntary displacement, loss of livelihood and environmental destruction in Indonesia, Pakistan, India, Bangladesh, and elsewhere. And yet, the AIIB's official channel for hearing about and addressing such concerns–its accountability mechanism–is broken. That's most clearly evidenced by the fact that the AIIB's accountability mechanism has yet to accept a single case as eligible. In response to our concerns, we were asked to be patient. As a 10-year-old bank, AIIB was still young, still growing up and not ready to be compared to other multilateral institutions. It is understandable that the bank will make mistakes and that it will need to continually evolve. What is unacceptable is that while AIIB takes its time to mature, people and the planet bear the consequences. As a part of its operating model, the AIIB skirts responsibility by shifting its legal and institutional responsibility onto peer institutions. AIIB's 'lean, clean, and green' model moves money quickly and with little oversight. The bank has financed more than US$60 billion during its first 10 years, a significant portion of which was committed through co-financing agreements with other multilateral development banks. As part of these agreements, the AIIB delegates the implementation and monitoring of environmental and social standards to the co-financing institution. As of 2024, AIIB claims that for 113 projects, worth $23.3 billion – including large infrastructure projects like hydropower, metro rail, airport extensions – it does not bear the responsibility to prevent or remediate harm to local communities. This statistic is a part of a worrisome pattern of the AIIB evading its obligations to local communities and the environment. Even when AIIB is the sole financier and therefore solely responsible for overseeing the implementation of its own environmental and social standards, its own accountability mechanism has never once independently reviewed whether the bank is following its own rules, nor whether its rules are adequate to prevent, mitigate and remediate environmental and social harms. Here, too, AIIB delegates its responsibility down to clients and project implementers, requiring them to resolve issues so that the AIIB does not have to. Even worse, under the guise of localization, AIIB requires communities whose lives, livelihoods, and environments are at risk from AIIB's investments to try to first seek redress from the project implementers who've contributed to the harm in the first place. This is the case, despite AIIB staff's own admission, project-level redress channels don't always exist and vary widely in effectiveness. This year, AIIB has an opportunity to prove that it is ready to enter its next decade as a responsible investor. The policy of the AIIB's accountability mechanism is undergoing an official and public review, with a draft policy published just days after the AIIB's Annual Meeting concluded. Improvements to that policy would be proof that the AIIB is ready to be accessible and accountable to the communities it impacts. An independent expert has already published a list of policy improvements, a majority of which are yet to be adopted. We're calling for the AIIB to adopt three concrete improvements: The AIIB's accountability mechanism should allow communities to directly file complaints to it without first attempting other avenues. Because of current access barriers, communities are either unable to or choosing not to raise complaints, leaving the bank vulnerable and unaware of unsustainable aspects of its projects. The AIIB's accountability mechanism, its president and its board should have the power to call for an investigation into whether a project complies with AIIB's environmental and social standards. The AIIB is responsible for compliance with its own rules, so it should be able to initiate an independent investigation even if no complaint is filed. The AIIB's accountability mechanism policy should be reviewed every five years to ensure that it is maturing alongside the bank. This is standard practice to ensure that AIIB's policies and practices don't become outdated. If the bank adopts these changes, we will applaud the bank's evolution towards responsible investing. If the bank does not adopt these changes, we will have proof that the bank cares more about itself than its mission. The AIIB does not have to be the same as other multilateral development banks; indeed, its promise lies in new approaches it can bring to improve upon past development practices. Regardless of its approach, however, the AIIB does have to be responsible for its impacts–both positive and negative–on people and the planet. As of its 10th anniversary, the AIIB has not exercised that responsibility. Instead, AIIB has acted like a ten-year-old child, wanting praise without responsibility. Radhika Goyal and Margaux Day are with Accountability Council, a San Francisco-based independent watchdog organization that advocates for people who have been harmed by internationally-financed projects such as dams, mines and oil pipelines.
South China Morning Post
11-07-2025
- Business
- South China Morning Post
After 10 years, AIIB welcomes new leadership – and fresh US challenges
Back to April 2016, at the Qingfeng steamed bun restaurant in Beijing's bustling Xicheng district, Jin Liqun lunched with the Asia editor of the Financial Times to introduce himself and China's newly created Asian Infrastructure Investment Bank (AIIB). Advertisement Beijing's decision to establish a development bank reflected in part a deep frustration with the reluctance of the world's leading economies to give China (and other leading developing economies) more influence in Bretton Woods institutions such as the International Monetary Fund and World Bank It also made clear a sharp difference in development priorities: the AIIB's core task would not be to tackle poverty, but – as its name suggested – to improve infrastructure and devote its keenest attention to Asia. 'We're not trying to upend the international financial and economic order, even though it leaves much room for improvement,' Jin insisted. 'This is really an opportunity for China to show it can work with other countries and to [better] international practice – not just Western practice – so people can be convinced China is a force for peace and prosperity in the world.' A decade later, as Jin prepares to step down as AIIB president and introduces his successor, Chinese finance ministry veteran Zou Jiayi , it may be timely to audit the bank's progress and consider how its role might evolve over the next 10 years. Advertisement Many remain sceptical about China as a force for peace and prosperity, particularly in the affluent West. But as the AIIB's membership has grown from 57 to 110 economies, the endorsement of its priority of infrastructure-building is broadly based across much of the developing world.
Reuters
02-07-2025
- Business
- Reuters
Climate and empowering women must be a priority, development bank bosses say
SEVILLE, Spain, July 2 (Reuters) - Multilateral development banks need to sharpen their focus on delivering climate action and on empowering women, the heads of two major MDBs in Asia and Europe told Reuters, as they face calls to be bolder, more flexible and inclusive. The president of the European Investment Bank, Nadia Calvino, and of the Asian Infrastructure Investment Bank, Jin Liqun, spoke on the sidelines of the once-a-decade United Nations development financing summit taking place in Seville. The event is overshadowed by criticisms it has shown a lack of ambition and by the absence of the United States, the biggest provider of international aid until U.S. President Donald Trump returned to office early this year. Trump has also withdrawn the United States from U.N. efforts to counter climate change and sought to reverse policy on inclusivity, making many companies and institutions across the globe reticent about championing diversity and sustainability. The AIIB's Jin welcomed civil society's push for MDBs to do more on climate as a "positive force for innovation and greater impact". The AIIB supported "climate-resilient" infrastructure under a broader definition that includes digital, health, and education infrastructure, he said. The EIB's Calvino said high-level climate commitments must translate into tangible investments and projects, naming as an example an initiative for climate-related debt clauses that allows vulnerable countries to pause repayments after disasters. The pre-summit outcomes, opens new tab agreement between U.N. members included a pledge to triple multilateral lending capacity. The U.S. said that crossed one of its red lines, opens new tab as it interfered with the MDBs' independence. Asked about French President Emmanuel Macron's call for MDBs to sacrifice stellar credit ratings to hit those new targets, Jin proposed rating agencies apply different standards to MDBs instead of those used for commercial banks or private companies. Calvino said the current system worked well, with the EIB's AAA rating enabling it to take on higher-risk investments and leverage EU guarantees. The U.S. also objected to the use of the word gender in the outcomes document, saying it did not support "sex-based preferences". Calvino, the EIB's first woman president, said empowering women was "both the right and the economically smart choice ... a no-brainer". Jin said female empowerment was key in the AIIB's investment decisions, pointing to a rural road project in Ivory Coast connecting female agriculturalists in previously isolated villages to main markets to sell products such as cashews and coffee beans.
Al-Ahram Weekly
01-07-2025
- Business
- Al-Ahram Weekly
AIIB, Arab Fund seal strategic pact for sustainable infrastructure across Arab region - Economy
The Asian Infrastructure Investment Bank (AIIB) and the Arab Fund for Economic and Social Development signed a memorandum of understanding (MoU) on Tuesday, establishing a strategic partnership to scale up their cooperation and accelerate the delivery of transformative, climate-resilient, and connectivity-driven infrastructure in shared priority regions. The signing occurred on the sidelines of the Fourth International Conference on Financing for Development (FfD4) in Seville, Spain. President of AIIB Jin Liqun and Chairman and Director General of the Arab Fund Bader Alsaad signed the agreement. AIIB, founded in 2016, is a multilateral development bank with 110 approved members globally and a capital base of $100 billion. AIIB focuses on financing infrastructure-related projects. It also supports projects that enhance regional connectivity and promote sustainable economic development across Asia and other regions. The newly inked MoU sets a comprehensive framework for collaboration between the two institutions. It covers sovereign and non-sovereign co-financing, joint project preparation, and strategic priority alignment in areas such as climate resilience, cross-border connectivity, digital infrastructure, and sustainable urban development. 'This partnership with the Arab Fund represents a major milestone in our shared pursuit of sustainable development. By combining AIIB's infrastructure finance expertise with the Arab Fund's regional knowledge, we can jointly mobilize more capital, drive innovation in financing, and deliver projects that directly address climate, digital, and urban infrastructure challenges,' said Liqun. 'It will enable us to deliver on our mission to finance sustainable development across the Arab region. The partnership also aligns directly with the Sustainable Development Goals (SDGs). We aim to channel vital resources to priority infrastructure projects that catalyze long-term prosperity and sustainability in our member countries,' Alsaad stated. The Arab Fund, established in 1972 and headquartered in Kuwait, is a regional financial institution dedicated to advancing economic and social development across the Arab world. The fund provides loans, grants, and technical assistance for critical projects in infrastructure, health, education, water and sanitation, and public services. It also plays a key role in regional cooperation and integration through its development financing initiatives. With a focus on demand-driven, high-impact initiatives, the AIIB-Arab Fund partnership is expected to unlock large-scale financing for critical infrastructure projects in sectors including clean energy, transport and logistics, digital connectivity, water and sanitation, and urban development and resilience. The agreement also positions both institutions to enhance their support for countries facing elevated financing challenges due to climate vulnerabilities or regional instabilities. The collaboration aims to facilitate cross-border infrastructure solutions, such as transport corridors and energy grids, that enhance regional integration and promote inclusive economic growth. Follow us on: Facebook Instagram Whatsapp Short link:
Zawya
01-07-2025
- Business
- Zawya
AIIB and Arab Fund forge strategic partnership to advance sustainable infrastructure development
Seville – The Arab Fund for Economic and Social Development and the Asian Infrastructure Investment Bank (AIIB) formalized a strategic partnership through the signing of a memorandum of understanding aimed at deepening cooperation and accelerating the delivery of sustainable infrastructure across shared priority regions. The signing ceremony took place on the sidelines of the Fourth International Conference on Financing for Development (FfD4) in Seville, Spain, and was officiated by Jin Liqun, President of AIIB, and Bader Alsaad, Chairman and Director General of the Arab Fund in the presence of senior representatives from both institutions. President Jin: "Our partnership with the Arab Fund represents a significant milestone in our shared commitment to sustainable development. By combining AIIB's infrastructure expertise with the Arab Fund's deep regional knowledge, we can deliver transformative projects that address the most pressing connectivity and climate challenges. Together, we will mobilize greater resources and drive innovation in infrastructure financing for a more sustainable future." The MoU establishes a comprehensive framework for collaboration between AIIB and the Arab Fund across sovereign and non-sovereign co-financing, joint project preparation, and strategic priorities including climate resilience, cross-border connectivity, and digital infrastructure, and sustainable urban development. Bader Alsaad, Chairman and Director General of the Arab Fund: "This significant partnership with AIIB will enable us to achieve our mission of financing sustainable development across the Arab region, aligning directly with the SDGs. Through this collaboration we will mobilize vital resources and strengthen our support for strategic infra-related initiatives, ultimately contributing to a more prosperous and sustainable future.' This partnership underscores both institutions' commitment to deepening collaboration with regional development partners and advancing innovative, demand-driven approaches to financing sustainable infrastructure for the future. About AIIB: The Asian Infrastructure Investment Bank is a multilateral development bank dedicated to financing 'infrastructure for tomorrow,' with sustainability at its core. AIIB began operations in 2016, now has 110 approved members worldwide, is capitalized at USD100 billion and is AAA-rated by major international credit rating agencies. AIIB collaborates with partners to mobilize capital and invest in infrastructure and other productive sectors that foster sustainable economic development and enhance regional connectivity. About the Arab Fund: The Arab Fund for Economic and Social Development is a regional financial institution based in Kuwait, established in 1972 to support the economic and social development of Arab countries. Through loans, grants, and technical assistance, the Arab Fund finances infrastructure, education, health, water and sanitation and public service projects that contribute to sustainable development and regional cooperation across the Arab world.
