AIIB releases guide on project approvals

MANILA, Philippines — China-led Asian Infrastructure Investment Bank (AIIB) released yesterday the framework that will guide investors on how the multilateral lender approves projects based on their environmental and social impact.

Under the framework, the AIIB said net proceeds from the sale of sustainable development bonds would be included in the ordinary resources of the bank.

“Pending their use, the net proceeds from the sale of the AIIB Sustainable Development Bonds will be invested as part of the AIIB’s liquid assets portfolio,” it said.

The AIIB has programmed a $10-billion borrowing program this year as it looks to expand its presence in Asian capital markets. To obtain capital from this facility, the multilateral institution said projects pitched by borrowers are assessed based on their socioeconomic outcomes.

Based on its framework, the AIIB will pour financing on infrastructure that will support members in attaining their green targets.

The Beijing-based bank plans to reach, if not exceed, by 2025 a 50 percent share of climate funding.

“This will cover a range of investments and sectors, including renewable energy and low-carbon public transportation, as well as better water management and sanitation, pollution control and enhancing ecosystem services,” it said.

The AIIB also vowed to allocate capital for projects that would facilitate domestic and cross border connectivity within Asia and between Asia and the rest of the world.

The commitment to bankroll infrastructure that links Asian economies stems from the AIIB’s goal to hit up to 30 percent share of cross-border connectivity projects by 2030.

Financing will be made available for infrastructure that promotes the use of new technologies. Funding will be dedicated as well for projects that mobilize private capital, as AIIB looks to boost to 50 percent the share of private sector financing in its approvals by 2030.

AIIB treasurer Domenico Nardelli said the framework is designed to indicate how the multilateral fulfills its commitment to sustainable development. He argued it increases transparency on how projects funded by the AIIB contributes to both the environment and economy.

The framework was crafted by France-based Credit Agricole CIB as sole structuring advisor on sustainability.