The Asian Infrastructure Investment Bank has approved its first four loans, pledging a total of $509 million to four projects in South, Southeast and Central Asia.
The AIIB will provide a $165 million loan for a power distribution system upgrade and expansion project in Bangladesh, and a $216.5 million loan for a national slum upgrading project in Indonesia, which will be co-financed with the World Bank.
The bank also agreed to provide a $100 million loan to help build Pakistan's M4 national motorway, a project it will co-finance with the Asian Development Bank and the UK’s Department for International Development. ADB, as the lead co-financier, has agreed to back the project with a $100 million loan, while DIFD is providing a $34 million grant for the project.
The fourth loan, a $27.5 million financing, will be allocated to support the Dushanbe-Uzbekistan border road improvement project in Tajikistan, co-financed with the European Bank for Reconstruction and Development.
“These projects, which span the energy, urban development and transport sectors, will help to bridge the region’s critical infrastructure financing gap and strengthen regional connectivity. We are very pleased that three of these projects are joint co-financing operations with our development partners, ADB, EBRD and the World Bank,” said Jin Liqun, AIIB’s president, in a statement.
“We are working on a number of additional projects and look forward to bringing them to our board for its approval later this year,” he added.
The Beijing-led bank, which supports infrastructure development and regional connectivity in Asia, intends to lend a total of $1.2 billion in 2016.
At the same time, the government of China has contributed $50 million to a new AIIB Project Preparation Special Fund, which is established to help the low and middle-income bank members prepare project proposals and provide access to advisory services. The bank is also seeking additional contributions to ensure the sustainability of the fund.