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AIIB approves first loans

28 June 2016

The Asian Infrastructure Investment Bank held its first Annual Board of Governors’ meeting in Beijing on 25–26 June 2016, preceded by the third Board of Directors’ meeting on 24 June. These meetings followed the inaugural meetings of the Bank’s Board of Governors on 16–17 January 2016. Board of Directors’ meetings have also previously been held in January and April 2016.

The AIIB President is Mr Jin Liqun; he is assisted by five Vice Presidents. Further information on the management of the AIIB can be found on the AIIB website.

The Bank has moved rapidly to commence lending. The Board of Directors approved the first four investment projects totalling $US509m in June. The loans, for power, transport and urban investments, are to Pakistan (US$100m), Tajikistan (US$27.5m), Indonesia (US$216.5m) and Bangladesh (US$165m). The first three loans are co–financed respectively with the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD) and the World Bank.

It is expected that further loans will be proposed by Management for consideration by the Board at its next meeting in Beijing on 27–28 September.

The Bank currently has 57 founding and prospective founding members, of which 37 are regional, and 20 non-regional, members.

As of 12 September 2016, 48 countries had ratified the AIIB’s Articles of Agreement. The remaining prospective founding members have until 31 December 2016 to lodge ratification instruments with AIIB management.

Many other countries have expressed interest in becoming members of the AIIB. The Board has established a deadline of 30 September 2016 for membership applications to be received from prospective new members.

Twelve constituencies are represented on the Board by a Director and Alternate Director. At the Annual meeting, Mr Chris Legg (Australia) was elected Director for the first full term (June 2016 to June 2018). He and Mr Alvin Lim (Singapore), Alternate Director, represent the constituency of Australia, New Zealand, Singapore and Vietnam.

Mr Legg has held senior Board and adviser positions at the World Bank and the IMF, including Alternate Executive Director at the World Bank (1995-1999) and the IMF (2008-2010) and Executive Director at the IMF (2010-2012). He is currently Chief Advisor in the Australian Treasury’s International Policy and Engagement Division.

Mr Lim is Director of International Relations at Singapore’s Ministry of Finance.

The AIIB Board of Directors is a non-resident board that will meet at least quarterly. The Board has established the operational and governance policies of the Bank. At its June meeting, the Board established a Special Fund to assist low income countries with project preparation. It also held an initial discussion on the design and role of the Compliance Effectiveness and Integrity Unit.

Business and non-government organisations from Australia, New Zealand, Singapore and Vietnam that would like further information should contact AIIB@Treasury.gov.au.