In our third year of operations in 2018, we made significant progress in laying the core foundations of our Bank, undertaking high-quality investments and maintaining financial sustainability. We expect our start-up phase to be completed by end-2020 when our core governance frameworks, strategies, policies and infrastructure will be in place.

Learning from another year’s experience, we’ve further refined our expectations and approaches for the next three-year planning horizon. Efforts will be focused on expanding the Bank’s capacity to provide quality service and value addition to our clients in a lean manner. This will, in turn, require a continued focus on building our team of high-caliber staff and fostering a shared corporate culture. As the results of this process will likely become evident only gradually over time, we expect these focus areas to remain prominent over the next three years.

Since we began operations, we’ve carefully managed our budget to meet the needs of a start-up institution and our expanding work program. In our early years, with neither experiential data nor an established budget system in place, it was difficult to manage the uncertainties in budget preparation and execution. With growing experience, better data and operationalization of a budget management system, uncertainties in planning and executing the budget will be reduced. We will continue to improve overall budget management by (1) implementing the next phase of our budget management system, (2) creating a cost accounting framework to effectively and efficiently deploy resources to support our business plan and (3) aligning all these with institutional priorities and strategic directions.

With regard to our financial performance, we expect AIIB to continue having a strong financial profile with sound capital ratios. Conditions permitting and bolstered by a strong credit rating track record, we expect to have an established presence in the global capital market.

As for our investments, we foresee demand for more flexible solutions in the infrastructure financing market. We can become a preferred provider of these financing solutions—despite our relative youth—by stressing our focus on infrastructure; long tenure; relatively low cost and transaction expenses; flexible structuring for loan and debt equity; long-term financing; risk management and high environmental, social and governance standards. Local currency financing is another measure we hope to establish to lessen risks caused by exchange rate fluctuations.

Finally, we need to manage the risks we face. We’re working on effective management of principal risks: credit risk of loan and guarantee, credit risk of equity investment, market risk, liquidity risk, counterparty credit risk, model risk, operational risk and compliance among others. We need to identify emerging risks to our capital, mitigate those risks early and maintain satisfactory capital levels to ensure that our triple-A ratings on a stand-alone basis are not affected.

These are all organization-building actions we need to execute, manage and coordinate simultaneously and effectively. How will we know if we’re headed in the right direction? We need to measure our overall organizational performance. In 2018 we continued working on our Corporate Results Frameworks—key performance indicators and selected portfolio results indicators which aim to measure how well our core strategic business activities meet organizational priorities.

We also need to know how efficiently and effectively organizational resources (human and financial) are used, and for this we’re devising a corporate scorecard, primarily to be used as an accountability tool between the Board and Management. All other existing reporting channels (quarterly progress reports on human resources, financials, business plan milestones, budget, etc.) should complement the scorecard and enable the Board to see how the Bank is performing.

As we learn, we will continue fostering the partnerships and relationships that have helped AIIB become the institution it is today. We are ramping up our outreach to multilateral, bilateral and private sector partners because only by working together can we address the infrastructure gap the world is facing.

We believe bottlenecks in infrastructure can only be effectively resolved through partnership and risk sharing. We want to encourage a dialogue between the public and private sectors so that government policies and private financiers’ objectives would be more closely aligned. This will help projects—particularly public-private partnerships—to secure funding and move forward.

We intend to play a role as innovator, convener and respected partner in this sector. Over time, we intend to make markets, mobilize interest in ESG investing principles, deepen capital markets for infrastructure in Asia and be a voice for international standards in infrastructure investing.

International cooperation and multilateralism are at the core of AIIB’s DNA. We are the product of the collaboration of our 57 founding shareholders who sought to address a specific need in Asia for increased investment in infrastructure. We continue to evolve thanks to the input and support of additional shareholders who have joined us since we began operations. As we enter our fourth year, we are scaling up our business, expanding our footprint and welcoming new staff—united in our mission to improve economic outcomes in Asia and beyond.