The Asian Infrastructure Investment Bank (AIIB), a multilateral development bank, has confirmed its commitment to environmental and social standards. The bank, which since 2016 has invested billions in projects that will contribute to the achievement of Sustainable Development Goals (SDGs), has already pledged financing for 15 SDG-related projects for 2021. It has also updated its Environmental and Social Framework (ESF) so as to step up its commitment to social and environmental values.
Set up in 2016, the AIIB has 103 approved members worldwide. The bank provides financing for sustainable and innovative green infrastructure projects mainly in Asian countries, as well as in some African and European countries.
In order to guide its clients to handle ecological and social risks, the AIIB has updated its ESF with the new amendments due to be effective from October 2021.
The main modifications of the revised ESF cover aspects such as a reinforcement of commitment regarding climate change, improvements to transparency and clarity, the implementation of new measures to address environmental, social, and governance techniques in capital market operations, the reinforcement of the importance of gender equality, biodiversity protection and the exclusion of asbestos from AIIB-financed projects.
AIIB Vice President, Joachim von Amsberg, noted: “The revisions to the AIIB Environmental and Social Framework demonstrate AIIB’s strong commitment to facilitating sustainable infrastructure development. It is part of our mission to help our clients make progress on their contributions to the Paris Agreement and achievement of the Sustainable Development Goals, and to build Infrastructure for Tomorrow.”
Committed to sustainability, since 2016 the AIIB has approved financing for 123 projects worth US$24.66 billion and committed financing equal to US$19.44 billion.
For 2021, the AIIB has already announced support for 15 approved projects related to areas such as energy, public health, transport, urban development, financial liquidity, etc., and some of these projects are detailed below.
India City Gas Distribution Financing
The purpose of this project is to slash the consumption of environmentally unfriendly petroleum products by expanding the availability of and upgrading accessibility to natural gas in nine geographical areas. In particular, by financing the development of the gas distribution network in cities, the project aims to connect 10 million residential households to piped natural gas systems, install 1,080 compressed natural gas stations serving the transport sector, and place 16,186 km of steel pipelines. The US$75-million-worth project is expected to be approved in May 20, 2021.
Second Health System Enhancement to Address and Limit COVID-19 under the Asia Pacific Vaccine Access Facility Project
Supported under the AIIB’s COVID-19 Crisis Recovery Facility and co-funded with the Asian Development Bank, this project’s objective is to support the Government of the Philippines to moderate the negative health, social and financial impacts of the pandemic by providing vaccines. The project commits to provide US$300 million with a published approval date of March 25, 2021.
Mymensingh Kewatkhali Bridge Project
This project aims to decrease congestion and advance mobility by targeting the cross-river bottleneck between Mymensingh and Shambhugonj on the Dhaka-Mymensingh-India corridor in Bangladesh via the construction of the Kewatkhali Bridge. The projected construction is intended to divert traffic away from the city’s central area. The project is worth US$260 million with a published approval date of February 25, 2021.
PLN East Java & Bali Power Distribution Strengthening Project
This project which is to be implemented in Indonesia aims to upgrade access to power services in East Java and Bali through infrastructure development. The scheduled tasks under the project include the installation of extra lengths of medium-voltage and low-voltage distribution lines as well as the installation of the supplementary volume of distribution transformers. The project aims to provide US$310 million with a published approval date of February 18, 2020.
