ADB ready to collaborate with China-led AIIB

KUALA LUMPUR: The Asian Development Bank (ADB) is ready to collaborate with China-led Asian Infrastructure Investment Bank (AIIB) to finance infrastructure development in the region.

“This region would then have a lot of money for infrastructure,” the multilateral development finance institution’s President, Takehiko Nakao, told Bernama.

He was met on the sidelines of the just-concluded inaugural Asean Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM).

Nonetheless, Nakao hoped that the AIIB would adhere to the international standard on safeguard policy on environment and social impact as well as procurement system.

“It is too early (to say) on what project we can collaborate with the AIIB...it has yet to be established formally,” he said.

Nakao said the ADB, with staff of diverse nationalities and expertise, has played a role in assisting the development in the region in the last 50 years.

The AFMGM has endorsed the AIIB, saying it could provide more fundingopportunities for Asean.

Malaysia’s Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah in representing the Asean officials said most Asean member countries were also founding members of the AIIB, and are currently awaiting progress on the new set-up.

Meanwhile, Nakao said the ADB was increasing its lending capacity by 50 per cent and looking at funding potential projects in the region.

Through the financially selfsustaining ASEAN Infrastructure Fund (AIF), he said ADB planned to issue bonds to raise additional funds for its operations.

It would require some US$100 billion per year to address selected ASEAN infrastructure investment needs for the next 10-year period, he added.

The AIF is a dedicated fund established in 2013 by the ADB.

The fund was incorporated as a limited liability company in Malaysia in April 2012, and became fully operational in 2013.

Shareholders now include Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, and ADB.

Malaysia has contributed US$ 150 million to the fund, bringing the total shareholders’ total equity commitment to US$485.3 million.

A total of US$165 million from the fund has been approved to fund a power transmission project and a sanitation project, both in Indonesia, as well as a power grid development project in Vietnam. — Bernama