AIIB to provide $900m loan for three projects

ISLAMABAD: The Asian Infrastructure Investment Bank (AIIB) plans to provide three project loans of $900 million including co-financing of $100 million for improving infrastructure of five major cities of Khyber Pakhtunkhwa (KP) along with Asian Development Bank (ADB).

“The AIIB plans to provide $400 million for Lahore Water and Wastewater Management Project which is expected to be presented before the Bank’s Board for final approval by March 2020,” the AIIB’s Senior Investment Operation Specialist Ghafran Shafi and Manager Investment Operation Najeeb Haider said while talking to a select group of reporters here on Wednesday.

The AIIB’s representative Ghafran Shafi said that they provided $0.5 million grant to WASA, Lahore for preparation of Lahore Waste Management Project of $400 million loan and it was expected that after meeting all procedural and technical requirements this loan would be tabled before the Board for final approval by March 2020.

The second proposed project of Rawalpindi Ring Road with loan of $400 million, he said, would be considered by Board for final approval by end of next calendar year in 2020. These two projects were standalone and would be executed with the project loan of AIIB only, they added.

There will be another project in the pipeline as co-financer along with Asian Development Bank (ADB) as the Manila-based lender had committed $250 to $300 million for KP’s Livable Cities as Multi Tranche Financing Facility (MFF) would be provided. In the first phase, the AIIB will provide loan of $100 million and it was expected that the Bank would contribute another $100 million for the second phase of MFF programme. The five selected cities for bringing infrastructure improvement in municipal facilities and other infrastructure included Peshawar, Kohat, Mardan, Mangora and Abbottabad.

Najeeb Haider, AIIB’s representative said, there were 57 founding members of the Bank that had now gone up to 100 so the AIIB decided to expand its project financing in other regions including Africa and Europe on the basis of certain criteria that it should have linkages with Asian region.

He said that total committed capital of AIIB stood at $100 billion out of which the existing working capital was standing at $20 billion. The AIIB’s had so far committed $10.5 billion for 53 projects in 18 countries.

When asked whether any linkage to promote Belt and Road Initiative (BRI) is introduced by Chinese President, the AIIB official said that the AIIB did not have direct linkage with BRI initiative. They were of the view that the AIIB was not competing with other lenders including World Bank, ADB or European Development Bank but it was complementing the efforts of other multilateral lender agencies. They said that the AIIB decided to work lean, clean and green so it had established its one office located at Beijing with workforce of 290 that would be increased to 550 over next three years. The AIIB, they said, financed green projects as it strictly adhered to environmental and other transparency standards.

“We provide client driven assistance to our member countries but the Bank consistently takes care of debt sustainability of loan recipient country,” they maintained. They were providing loans to both governments as well as private sector. To another query regarding charged mark up on loans, they replied that it was equivalent to World Bank.

The AIIB would hold Pakistan Business Forum on Thursday (today) here in Islamabad in order to hold consultations with the Centre and provinces for expanding its footprint here in Pakistan.