The Beijing-led Asian Infrastructure Investment Bank has signed its first co-financing framework agreement with the Washington-based World Bank Group to jointly develop projects across Asia this year.
The AIIB expects to approve about $1.2 billion in financing, with World Bank joint projects anticipated to account for a sizable share, according to an AIIB statement.
The two multilateral lenders are currently discussing “nearly one dozen co-financed projects in sectors that include transport, water and energy in Central Asia, South Asia and East Asia”, the AIIB said.
Under the agreement, the World Bank will prepare and supervise the co-financed projects in accordance with its policies and procedures in areas like procurement, environment and social safeguards. “The AIIB will simply co-finance,” said Jim Yong Kim, the World Bank’s president at a press conference.
The World Bank said it has invested $18.8 billion in infrastructure as of 30 June, 2015. It will leverage more private finance through new partnerships, such as its Global Infrastructure Facility, and the growing portfolios of the International Finance Corporation and the Multilateral Investment Guarantee Agency.
According to Chinese news agency Xinhua, AIIB is cooperating with the World Bank and the Asian Development Bank to jointly approve the first batch of co-financed projects in June.
AIIB president Jin said it makes sense for the AIIB to establish co-financing agreements with other multilateral lenders even after AIIB builds its own capacity, due to the risk and scale of infrastructure projects.
Officially up and running since January, the $100 billion lender aims to promote regional cooperation, advance sustainable economic development and to improve infrastructure in Asia.