Two Years On

The first Chinaproposed multilateral financial institution has achieved a great deal in its first two years of operation By Wang Jun

On January 16, 2016, the Asian Infrastructure Investment Bank (AIIB), a multilateral development bank proposed by China, was officially launched after 27 months of preparation. Within the past two years, AIIB has been establishing systems and an organizational structure while steadily expanding loans and investment.

On December 19, 2017, the AIIB Board of Governors approved four new applicants, the Cook Islands, Vanuatu, Belarus and Ecuador, for membership of the bank, bringing the total number of members to 84. This marked the fourth round of admissions since AIIB’s launch, when its membership stood at 57.

“The steady expansion of our member- ship represents a vote of confidence in AIIB by the international community,” said Jin Liqun, President of AIIB.

“AIIB’s approved membership has risen from 57 to 84, expanding our reach within Asia and around the world,” said Danny Alexander, Vice President and Corporate Secretary of AIIB.

Having been deeply involved in the bank’s preparation process, Jin believes AIIB has made steady progress. Many countries joined AIIB because they have realized that the initiatives for shared development put forward by China in the establishing of the bank are being put into practice. As the largest shareholder of AIIB, China has taken concrete measures to fulfill these commitments.

More members are supporting AIIB with practical involvement. On December 16, 2017, the Ninth China-UK Economic and Financial Dialogue released policy outcomes, according to which the UK pledged to contribute $50 million to AIIB’s Project Preparation Special Fund, which provides support primarily to low-income developing members to prepare high-quality projects.

“The UK strongly supports AIIB’s vital mission to address the infrastructure gap in Asia. I am very pleased to confirm our $50-million contribution to the AIIB Special Fund, which will help the low-income countries that most need our joint assistance to prepare credible project proposals so they can access finance from the bank,” said Chancellor of the Exchequer for the UK Philip Hammond.

“Within the two years of our operation, we can say we have achieved progress and reached milestones as expected,” Jin said.

Project expansion

On December 11, 2017, AIIB announced its first project in China, the Beijing Air Quality Improvement and Coal Replacement Project, providing a loan of $250 million with the aim of reducing coal use by 650,000 tons every year by connecting 216,750 households in 510 rural villages to the natural gas distribution network.

Together with this project, AIIB has also approved a project for a nationwide fiber optic broadband network in Oman, and a rapid transit system in Bangalore, India. Within two years, the total number of AIIB projects has reached 24, covering 12 countries with a total credit volume of $4.2 billion.

“Usually it is difficult for an institution to conduct large-scale projects in the first two years of operation, but AIIB approved projects of $1.7 billion in its first year of ex-