Asian Infrastructure Investment Bank or AIIB has approved 165 million U.S. dollars in loans for a Bangladesh project - the first batch of loan for the country from the China-led development bank.
The banks Board of Directors Friday approved its first 4 loans totaling 509 million U.S.dollars to finance 4 projects including that one of Bangladesh.
Three of the 4 projects are co-financing operations with multilateral development bank (MDB) partners, said the global lender in a website post on Friday.
The three other approved loans are a 216.5 million U.S. dollars loan for Indonesia, a 100 million U.S. dollars loan for Pakistan and a 27.5 million loan for Tajikistan.
AIIBs President Jin Liqun noted, I am delighted to announce that AIIBs Board of Directors has today just six months after the Banks inauguration -- approved the first group of loans. These projects, which span the energy, urban development and transport sectors, will help to bridge the regions critical infrastructure financing gap and strengthen regional connectivity. We are very pleased that three of these projects are joint co-financing operations with our development partners, ADB, EBRD and the World Bank. This has been an outstanding and tangible demonstration of multilateral cooperation that has expanded the pool of financing available to our joint member countries. We are working on a number of additional projects and look forward to bringing them to our Board for its approval later this year.
The Banks Vice President and Chief Investment Officer, DJ Pandian, welcomed the new investments noting, The Bank places tremendous importance on ensuring that its investments lead to positive results and measureable outcomes for its clients and will improve the lives of the millions of people in the different regions of Asia.
The Bank, which supports infrastructure development and regional connectivity in Asia, is targeting lending of approximately 1.2 billion U.S. dollars in 2016.
Three of the 4 projects are co-financing operations with multilateral development bank (MDB) partners.
The approved loans are:
216.5 million U.S. dollars loan for a National Slum Upgrading Project in Indonesia, expected to be co-financed with the World Bank;
100 million U.S. dollars loan to finance the Shorkot-Khanewal Section of National Motorway M-4 in Pakistan, co-financed with the Asian Development Bank (ADB) and the United Kingdoms Department for International Development (DFID); and
27.5 million U.S. dollars loan for the Dushanbe-Uzbekistan Border Road Improvement Project in Tajikistan, co-financed with the European Bank for Reconstruction and Development (EBRD); a165 million U.S. dollars loan for a Power Distribution System Upgrade and Expansion Project in Bangladesh;
Bangladesh's highest economic policy-making body, the Executive Committee of the National Economic Council (ECNEC) chaired by Prime Minister Sheikh Hasina, last month approved the project.
Planning Minister AHM Mustafa Kamal told reporters that the Bangladesh Rural Electrification Board (BREB) and the Dhaka Electric Supply Company Limited (DESCO) are entrusted to implement the project.
The project is designed to expand electricity coverage by providing 2.5 million new service connections in rural areas and upgrade grid substations and convert overhead distribution lines into underground cables in northern Dhaka.
The AIIB said in a website post that the project will supplement other development partner efforts by providing additional financial resources to connect more rural and urban consumers, further reduce distribution losses, and improve the quality and reliability of power supply in Bangladesh.
"The project, upon completion, is expected to benefit about 12.5 million people in rural areas," it added.
Officials say Bangladesh is looking to AIIB as the country, which has already identified inadequate electricity supply as a major constraint on GDP growth, and overall economic development, is in a dire need for more funds to develop mega infrastructure projects.
They said Bangladesh is now keen to explore alternative sources like AIIB which is expected to offer more loan than other traditional international lending agencies.
AIIB, launched formally in December last year, is an international financial institution that particularly aims to support the building of infrastructure in the Asia-Pacific region.
The AIIB expects to lend 10 to 15 billion U.S. dollars a year to members for at least five years.
