AIIB to back two power projects with $320m

The Beijing-led lender has approved $829m in loans so far, aiming to extend that figure to $1.2 billion this year.

The Asian Infrastructure Investment Bank has approved its second batch of loans for two power projects, co-financing with the World Bank and other multilateral lenders and banks.   

The AIIB will provide a $300 million loan for the Tarbela 5 hydropower extension project in Pakistan, a deal co-financed with the World Bank. The funding will help install and commission an additional power house utilising the existing tunnel at the dam, which was built in the 1970s. Once completed, it will provide an additional generation capacity of 1,410MW. 

A $20 million loan will also be provided to back a 225MW gas-fired project in Myanmar. The latter is being co-financed with other multilaterals and commercial banks, which AIIB did not identify. The project will be the largest gas-fired independent power producer in the country.   

“The two projects will help to ease the severe power deficit in both countries and contribute to the core mandate of AIIB to support green and cost-effective infrastructure. We are very pleased that these two projects are joint co-financing operations with our development partners. With the approval of two new projects, we are well on our way to meeting our target to extend financing of $1.2 billion in 2016,” AIIB president Jin Liqun said in a statement. 

Having started operations in January, the AIIB approved its first batch of project loans in June. The $509 million debt package helped finance four projects in the power and roads sectors with other development banks, including the Asian Development Bank and the European Bank for Reconstruction and Development.