The Asian Infrastructure Investment Bank, after opening its doors for business in January, held its first annual meeting over the weekend in Beijing, China, where it is headquartered.
The AIIB has barely been operational for six months and has announced a handful of projects, all but one co-financed with existing development institutions, including the World Bank, the Asian Development Bank, and the European Bank for Reconstruction and Development.
The annual meeting brought together representatives from the 57 founding members and had a wide agenda, focused on updates on the bank’s ongoing operations, including its $500 million in already authorized project loans, and future plans.
The AIIB’s first four authorized development projects are in Bangladesh, Indonesia, Pakistan, and Tajikistan. The Pakistan and Tajikistan projects had been reported previously, and the final loan amounts will be $100 million and $27 million respectively. Bangladesh will receive a $165 million loan for electricity grid coverage expansion and Indonesia will receive a $216.5 million loan for a co-financed World Bank slum development project. The Bank’s board of governors approved the loans on Friday.
The AIIB, with 57 members, is poised to get even larger. The bank drew considerable media attention in early 2015, when several Western European states, including the United Kingdom, France, Germany, Spain, and Italy, rushed to join up with the China-led initiative.
Now, the Bank appears to expanding to the southwest of the world map, bringing in Latin American and Africa states as members. Currently, Brazil is the only Latin American member of the AIIB, while Egypt and South Africa are the bank’s two African shareholders.
In his remarks to the gathered shareholders, Jin Liqun, the AIIB’s president, said that he “would like to extend a warm welcome to the 24 representatives of potential applicants who would like to join this Bank,” noting that several states are slated to sign up to the AIIB.
So far, the list of countries vying for AIIB membership includes Algeria, Chile, Colombia, Cyprus, Greece, Ireland, Libya, Nigeria, Senegal, Sudan, and Venezuela.
Lou Jiwei, the Chinese finance minister and the chairman of the AIIB’s board of governors, said “I can assure you more Latin American countries will be members very soon,” adding that “Given the increasingly close relationship between Asia and Latin America, we will not be short of projects to finance.” The AIIB is authorized to only finance projects among its member states.
As I’ve written before, the AIIB’s decision to co-finance its first projects speaks to a cautious and steady approach. The Bank’s $500 million in approved projects is a drop in the bucket given its overall capitalization of $100 billion.
The AIIB is also helping facilitate project preparation among its less developed member countries. On Saturday, AIIB President Jin and Chinese Vice Minister of Finance Shi Yaobin set up a $50 million project preparation fund to “support the Bank’s less developed member countries in preparing projects for AIIB financing.”
That fund is expected to be operational later this year, potentially leading to a significant increase in member financing requests.