SINGAPORE (TVBS News) — The Asian Infrastructure Investment Bank (AIIB) invests in infrastructure while promoting regional cooperation and partnerships that help foster sustainable economic development, create wealth, and improve infrastructure connectivity in Asia.
Knowing that Singapore is an infrastructure hub home to several international entities and agencies, there is little wonder that the multilateral development bank (MDB) participated in the ninth Milken Insitute Asia Summit.
“You could well imagine that many of those (entities) were either in partnership already, or we’re working with them for project opportunities across Asia through the next generations,” AIIB CFO Andrew Cross told Wenchi Yu of the TVBS Meeting room on Friday (Sept. 30).
Cross explained that an MDB is built for “generational investment,” not for “an economic cycle or an investment cycle.” Against this backdrop, he remarked that the AIIB’s 105 shareholders, all sovereign states, want to prioritize investing in infrastructure.
“And there’s a lot that needs to be done, right. So the shareholders gave us US$100 billion of capital,” he said, stressing a lot of collaboration and cooperation with other MDBs. “And so in order to do that, our standards have to be equivalent.”
Asked whether the AIIB aimed to replace the Asia Development BankChina (ADB) or whether China, its biggest shareholder, is using the regional institution to finance the Belt and Road Initiative (BRI), Cross told Wenchi Yu of several misconceptions.
To begin with, India, not China, is the biggest beneficiary of AIIB’s loans to public and private institutions. “Across the 105 member sovereigns (of AIIB), all of them have national policies,” he went on.
“China has a national policy, which is Belt and Road Initiative, right. But every one of the other 104 shareholders equally have their own national policies. The role of AIB is a multilateral development bank. So it's looking at infrastructure projects across Asia.”
More importantly, Cross remarked that there is no official authority to define whether a project is part of the BRI or another country’s national priorities. “We may be investing in a renewable's project in Central Asia,” he said. “That could equally be a project that some people might think is part of BRI, recognizing there is no standard or stamp around BRI.”
The AIIB has triple-A ratings, which tells investors that the bank has a vast pool of equity for its balance sheet. It shows that the AIIB was built to be “generational, which means not just one generation, but three, four or five generations.”
“This means you have to have a really robust capital structure. Also, the investors which are the shareholders, which are the countries, rightly expect you to be what's considered counter cyclical,” he concluded.
