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AIIB Program gathers momentum

12 October 2016

The fourth meeting of the Board of Directors of the Asian Infrastructure Investment Bank (AIIB) was held in Beijing on 27-28 September 2016. Directors also held a retreat in the days prior to the meeting, providing an opportunity for discussion of the strategic direction of the AIIB in an informal setting.

The Board approved a further two loans at the September meeting, both in the energy sector. Following the four loans approved in June, the Bank’s total investment has reached US$829 million.

The Bank invested US$300 million in the Tarbela 5 Hydropower Extension Project in Pakistan, co-financed with the World Bank, and US$20 million in Myanmar’s Myingyan 225MW Combined Cycle Gas Turbine Power Plant Project, co-financed with other multilateral development banks and several private financial institutions. The latter project has a special significance, as it is the Bank’s first private sector project.

The Board received an update from management on the development of the Bank’s project pipeline, which provides forward-looking information on the many projects at various stages of preparation by the Bank. ┬áThe Bank expects to bring further projects to the Board for consideration at its next meeting in December 2016.

The Board has commenced consideration of its energy strategy. The meeting discussed a draft Issues Note ‘AIIB Energy Strategy: Sustainable Energy for Asia’, which was then refined and launched for public consultation.

Following consideration of the outcomes of this consultation, a second round of public engagement will be held before the energy strategy is finalised in mid-2017. Interested stakeholders from within the constituency have contributed to the first round of consultation and stakeholders are encouraged to do so when the second round opens. Details will be available on the constituency website and on the AIIB’s website.

The two committees established by the Board held their inaugural meetings in Beijing at the time of the September Board meeting. ┬áThe Policy and Strategy Committee, chaired by Australia’s AIIB Director Mr Chris Legg, and the Human Resources and Budget Committee, have settled their indicative work plans and will each meet several times a year to support the Board through consideration of issues of importance to the Bank.

The AIIB is very encouraged by the high level of interest by both regional and non-regional countries in joining the Bank, which currently has 57 founding and prospective founding members. The Bank is now considering the formal expressions of interest made by this second wave of applicants, with a view to welcoming the first new members early in 2017. Amongst the many countries that have expressed interest in joining the Bank is Canada, whose Finance Minister, Mr Bill Morneau, announced Canada’s intention to join the Bank during a visit to Beijing in late August.

Recruitment efforts are continuing with the intention of having close to 100 full-time staff in the Bank’s office in Beijing by the end of 2016. Mr. Thierry de Longuemar, a French national, has been appointed to the important role of Vice President, Chief Financial Officer. Mr. Longuemar joins the AIIB from the ADB, where he was a Vice President for the past five years; he has worked for more than three decades in the multilateral and private sectors.

The Bank’s International Advisory Panel has met for the first time. The Panel, which includes former senior government and financial officials from both regional and non-regional countries, provides independent advice to the President of the Bank.

Following a competitive tender process, in which eminent international audit firms were invited to participate, the Board approved the appointment of PwC as the AIIB’s external auditors for a term of ten years, with a mid-term (5 year) review.