AIIB Development: Forecast and Implications

Abstract

On June 24-26, 2016, the Asian Infrastructure Investment Bank (AIIB) held a board of directors meeting and its first annual meeting in Beijing, China. President Jin Liqun and 57 member state representatives (governors) were present, four projects were approved, and the second general meeting was settled to be held in June, 2017 on Jeju Island. USD 509 million worth of loans will finance four projects approved by the AIIB (Pakistan M-4 Highway, Tajikistan Border Road, Indonesia Slum Improvement, and Bangladesh Electricity Grid Construction). Three of these are cofinancing operations with other multilateral development banks (MDBs); only the Bangladesh Electric Grid Construction project is a stand alone venture. The AIIB has made speedy headway since its inception in 2016, and this can be attributed to the fact that these projects were ones already proposed by MDBs or recipient countries (Table 1). The four projects can be defined by the following characteristics: 1) infrastructure investment in countries situated on the path connecting the Belt and Road Initiative, 2) proposals by recipient country governments, 3) co financing with other MDBs, and 4) small loans.