AIIB outlines investment areas
(7 December 2015 – China) The China-led Asian Infrastructure Investment Bank (AIIB) will invest in five key areas－energy, transportation, rural development, urban development and logistics－ a senior official told the 6th China-South Korea Banking Development Forum in Shanghai.
The infrastructure bank will later expand the investment to other areas such as education and healthcare to promote social development, said Chen Huan, chief officer of the Multilateral Interim Secretariat of AIIB during the forum last week.
The scale of project investment and bond issuance will not be big to start with. The bank is planning to issue bonds worth $100 million to $500 million in the first year of operation and is still waiting for approval by the board of directors.
The bank is expected to meet the requirements for operation by the end of this year according to Huan. Twelve of the 57 founding members have approved its charter so far and they account for more than 40 percent of the total capital. India and Russia are likely to approve the charter by the mid-December.
The mission of the AIIB is to mobilise social capital. The size of investment for an infrastructure project is so huge that the bank has to share the risk with others, he said.
"The policy framework and investment environment is fairly poor in underdeveloped countries and needs improvement. That's why it is necessary to set up an international financial institution like the AIIB. We will go to these countries first to handle the risk and solve the problems associated with government policies, thus guiding commercial banks to participate in the region's infrastructure projects," Huan said.
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