China-backed AIIB approves first loans

BEIJING: The China-backed Asian Infrastructure Investment Bank (AIIB) approved its first four loans totalling over half a billion dollars, it announced Friday, as it joined forces with putative rivals to finance projects across Asia. The Beijing-based AIIB has been viewed by some as a foe to the World Bank and the Philippines-based Asian Development Bank (ADB), which was founded in 1966. But three of its

first four loans for projects in Pakistan, Indonesia, Tajikistan, and Bangladesh were financed jointly with the ADB and World Bank, it said. AIIB president Jin Liqun called the joint loans a “tangible demonstration of multilateral cooperation that has expanded the pool of financing available to our joint member countries”. Supported projects include a $165 million loan to bring power to rural Bangladesh, $216.5 million to improve Indonesian slums, $100 million to finish building a four-lane highway in Pakistan and $27.5 million to upgrade a road in Tajikistan. In its first year of operation, the AIIB expects to approve about $1.2 billion in financing and will approve another batch of projects by the end of the year, it said. Beijing riled some World Bank backers two years ago when it moved to establish the AIIB. Critics worried that it would set much lower standards for projects and undermine principles of social, environmental and economic sustainability adhered to by the World Bank and other multilateral development finance institutions. The United States, and Japan — the world’s largest and third-largest economies, respectively — have notably declined to join the bank.

The AIIB was formally created in December with 57 members, and China the largest shareholder with 30 percent.