The Asian Infrastructure Investment Bank (AIIB), under the leadership of President Jin Liqun, is redefining its role in the 21st century as a multilateral development bank with a keen focus on sustainable infrastructure and climate resilience. In his address in Auckland on October 31, President Jin articulated the bank's ambitious goal: to direct at least 50 percent of all financing approvals to climate finance by the year 2025.
Founded in 2016, with its headquarters in Beijing, the AIIB emerged as a response to the immense infrastructure needs across Asia.
Starting with 57 founding members, the bank has swiftly grown to encompass 109 member states, indicating its rapidly increasing global influence. The AIIB has emphasised its commitment to international standards of governance and transparency, with China as the largest shareholder, holding a 30 percent stake.
President Jin proudly stated that the bank has already aligned all new financing with the objectives of the Paris Agreement, the landmark 2015 international treaty on climate change.
According to reports, of the total US$25.25 billion in financing approvals since the bank's establishment, US$11.75 billion has been allocated to climate projects. This figure includes US$8.29 billion dedicated to mitigation efforts, with the remainder earmarked for adaptation strategies.
While the AIIB was initially created with a primary focus on infrastructure development, the bank’s chief executive has stressed the institution's commitment to environmental preservation, as highlighted in their Climate Action Plan.
The AIIB has distinguished itself not only through traditional infrastructure projects like roads and bridges, but also by financing innovative green projects. These encompass renewable energy installations, energy-efficient buildings, and smart city developments.
The bank's vision goes beyond economic growth, embedding environmental protection and social development into its core objectives.
President Jin said, “We should not separate the traditional infrastructure from the so-called climate change projects. Climate financing permeates all of the infrastructure projects. We finance public transport systems in many countries for what purpose? It’s to reduce the driving of individual cars to achieve better energy efficiency. So, this is what we do. Working together to design a project which can develop infrastructure and at the same time help [the beneficiary country] moving toward net-zero [emissions].”
Due to their lean, clean, and green mission, President Jin reinforced AIIB’s criteria in financing development projects are much stringent now.
He states, “ all the infrastructure investments that we are financing today must be different from the infrastructure projects from 30 or 40 years ago. In today’s world, any infrastructure projects must be designed, implemented, and maintained by very high standards. We look at the important factors such as whether this [proposal] is environmentally benign or would it reduce emissions? If this is a clean and green project.”
“We need to know the impact of the project to the people and the environment. It’s a difficult process but these important factors must be addressed,” Jin continued.
Although, the Beijing-based development bank aims to finance more renewable energy projects, Jin Liqun has indicated caution in investing in energy sources like hydro and gas. Nevertheless, the AIIB is open to backing gas power plants for a transitional period, provided that these plants demonstrably replace coal-fired facilities in the recipient nation.
President Jin conveyed his appreciation to New Zealand in his speech at the event hosted by the New Zealand Institute of International Affairs, recognising Aotearoa as one of the OECD countries that has supported the AIIB since its inception.
“I am expressing my gratitude to New Zealand for the consistent support of a multilateral bank tailored for the 21st century as one of the architects of the constitution, a trade player, and a pioneer, I am deeply grateful. However, I often say that you cannot take this kind of support for granted; we must work to earn trust and support.”
“Trust and credibility have to be earned. We need to work diligently at it. I come with a promise to align with the people of New Zealand, to live up to your expectations, and to do our utmost in assisting Asia and beyond in achieving a better future for both the present and future generations. This is our sacred mission,” he said.
President Jin’s expression of gratitude was inspired by a reflection on the institution’s origins which dates back a decade. During that period, the AIIB was in its conceptual phase, a proposition from China under the leadership of President Xi Jinping. The envisioned role of this fledgling institution was to serve as a supplementary entity to established multilateral development banks such as the World Bank and the Asian Development Bank (ADB).
Despite the presumably collaborative intent, the AIIB's emergence was met with skepticism from various quarters. Critics raised concerns, perceiving the AIIB as a potential competitor to the established dominance of the World Bank and ADB, which are largely influenced by global powers like the United States and Japan.
The narrative of skepticism extended further, with some observers casting the AIIB in a contentious light. They viewed the bank as a strategic tool for China, aimed at expanding its influence not just within the Asia Pacific region, but also on a global scale.
These apprehensions were rooted in the fear that the AIIB might be wielded to advance China's strategic objectives, potentially compromising the interests of other nations in the process. This critical viewpoint underscores the complex geopolitical dynamics that often underpin international financial institutions and their operations.
However, in his recent statement, President Jin dispelled the notion of rivalry between AIIB and other established financial institutions. He remaked, “we are working closely with the World Bank and Asian Development Bank and other institutions. People have some misconceptions that these banks are must be competing against each other, actually we are not. We have vast number of projects together and we cooperate extensively.”
This collaborative approach, he said, underscores the AIIB's role as a partner in development, rather than merely a funding source.
He also expressed pride in the bank's expanding membership, viewing it as a testament to its increasing credibility and attractiveness on the global stage. This growing success, he noted, is grounded in the bank's core principles of transparency, inclusiveness, and ensuring mutual benefits for all involved parties.
As the AIIB charts its course, its ambition and commitment to sustainable and resilient infrastructure position it as a key player in addressing global challenges. Under Jin Liqun’s leadership, the AIIB focuses on economic viability, environmental sustainability, and social responsibility.
However, this progressive stance raises questions about the bank’s ability to balance these ideals with practical economic and political realities. As critics argue that while AIIB’s goals are commendable, its true challenge lies in navigating complex geopolitical landscapes and delivering on its commitment without compromising on its declared values.
-Asia Media Centre