AIIB eyes co-financing with pension funds, insurance

BEIJING: The China sponsored Asian Infrastructure Investment Bank (AIIB) in which India is the second biggest stakeholder is looking to work with pension funds and insurance firms to co-finance infrastructure projects, its President has said.

AIIB president Jin Liqun said during a business forum held in the northwestern Chinese city of Xi'an yesterday that other regional infrastructure lenders and financial institutions have also expressed interest in co-financing opportunities with AIIB.

China last year cleared a proposal to invest its pension funds valued about $315 bin stocks and equities after the government sets rules to regulate the change.

Observers said China may seriously consider investing the funds in AIIB projects as most of the infrastructure finance to different countries goes through their governments which ensure safety and better returns.

Jin said the Beijing-based lender is working on a mechanism to enable long-term investors such as pension funds and insurance companies to join its funding of infrastructure projects.

AIIB has already approved four loans totaling $509 million to fund infrastructure projects in Bangladesh, Pakistan, Tajikistan and Indonesia.

Three of them are expected to be co-financed with partners including the World Bank, the Asian Development Bank and the European Bank for Reconstruction and Development.

AIIB will begin reviewing membership applications from some 30 countries in September as it calls on more countries to join its infrastructure funding efforts.

Jin added that the world's first multilateral infrastructure lender led by a developing country will chart a new course in funding projects while learning best practices from established lenders.

He said the lender has been designed to ensure efficiency and accountability and it will also review the environmental and social impact of infrastructure investment.

The AIIB was founded in December 2015 and counts many major developed countries, including the United Kingdom, Germany, Australia and Singapore, as prospective founding members, state run Xinhua news agency reported.

The AIIB was officially established late last year with 57 founding members.

With authorised capital of $100 billion, China is the largest shareholder with 26.06 per cent voting shares.

India is the second largest shareholder with 7.5 per cent followed by Russia 5.93 per cent and Germany with 4.5 per cent.