2019 AIIB Annual Report and Financials

OUR IMPACT

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Our Impact

Bangladesh: Safe Travels for Antora and Kalpona

Our low-income members face capacity lags in preparing bankable infrastructure projects. AIIB’s Project Preparation Special Fund provides support in this regard. One such project is the Sylhet to Tamabil Road Upgrade Project which aims to improve cross-border connectivity between Bangladesh and India via a safe and efficient road link between Sylhet and Tamabil.

This project will shorten the travel time of residents such as Antora who walks six kilometers to school. It could also increase road safety for tea stall owner Kalpona whose brother-in-law met an unfortunate accident and was not rushed to a hospital immediately because poor road conditions and heavy traffic delayed the arrival of an ambulance. Without proper roads, Kalpona calls the area a “death trap.” Watch the stories of Antora, Kalpona and other residents in the video below.
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Sri Lanka: Manorathna Pushes Back Against Landslides

The 2017 landslide has made life difficult for 42-year-old Manori Manorathna who lives in the highlands of Sri Lanka’s Sabaragamuwa Province. She gets by on a day laborer’s humble income in Ayagama, a small town about 106 kilometers southeast of the Sri Lankan capital of Colombo.

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Life was good two years ago. She was blessed with a good house and a good job, but both were swept away by the catastrophic landslide.

“We were displaced,” Manorathna says wistfully, walking past the remnants of her house. “We lost everything following the heavy rain. Now we fear even drizzles.”

Sri Lanka is affected by monsoons that vary by region. Annual rainfall is 2,500-5,000 millimeters in the southwest where Ayagama is located. Heavy rainfall makes Sri Lanka vulnerable to various disasters. Landslides are particularly frequent in the central highlands, resulting in fatalities and damage to infrastructure and the environment.

“Now we don’t go into town when it rains,” explains Manorathna’s brother, 60-year-old tuk-tuk driver M A Gnanassena. “We fear the mountain will get washed away again. If it crashes down, the river will overflow, flooding the entire town.”
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While no one died in Ayagama thanks to early warnings issued by law enforcement and disaster management officials, mudslides destroyed 14 houses and 14 businesses. The Ayagama Sri Gangaramaya temple housed many residents displaced by the disaster.

“We live in fear,” says the temple’s chief priest, Rambukpota Dhammadinna. “The 2017 landslide not only damaged part of our 150-year-old temple—debris also blocked the river, causing massive floods. Authorities should take action to mitigate landslides before another disaster takes place.”

The Sri Lankan government is doing precisely that. Landslide survivors and about 1,000 families face fresh hopes for housing and employment with a project called Reduction of Landslide Vulnerability by Mitigation Measures initiated by the Sri Lankan Government in collaboration with the Asian Infrastructure Investment Bank (AIIB) through a USD80-million loan. The government is providing the rest (27 percent) of the project’s total financing.

Manorathna and her brother Gnanassena are aware of the project.

“Officials are now making arrangements to mitigate further landslides and expand the existing town,” says Manorathna.

The project will make relocation of the town unnecessary and create more space to expand the existing township. Project funds will also be used to mitigate landslides on the Rathnapura-Adam’s Peak road. Tourism is vital to Sri Lanka, with an estimated USD4.4 billion in revenue in 2018. Rathnapura is home to the Sinharaja Forest Reserve and Adam’s Peak—two popular tourist destinations—meaning the landslide mitigation project will benefit tourism as well.

“The project’s objective is to reduce risk and damage from landslides by implementing mitigation measures and enhancing policy and regulations associated with landslide management,” explains R MS Bandara, National Building and Research Organisation director. Bandara adds that the project diversifies AIIB’s portfolio as it is the Bank’s first in the area of disaster risk mitigation. It is also aligned with Sri Lanka’s infrastructure priorities.

The project aims to protect people from landslides and increase the length of roads and railways bolstered by the applied measures. It will also enhance land use guidelines for landslide-prone areas and climate resilience standards and specifications for landslide prevention and mitigation.

“We coordinated with relevant stakeholders and government officers and finalized the mitigation and expansion plan,” says district secretary Niranjan Jayakody. “This project is important as it will directly benefit people in the area and help the national economy by boosting tourism and allowing tea and rubber produced in the area to be transported to the capital.”

Nishantha Pushpakumara, Ayagama’s local council chair, adds that land prices crashed following the 2017 landslide. Implementation of the mitigation program is expected to boost the town’s economy and improve the livelihoods of people living nearby.

Tuk-tuk driver Gnanassena hopes the Sri Lankan government implements the project quickly so they can stop living in fear. His sister Manorathna adds: “The project will allow us to return to our own land.”

Lao PDR: Keeping the Road Safe for Manivanh

For 30 years, Manivanh Bualavong has lived in Naxaithong District on National Road 13 (NR13) north of Vientiane, Lao PDR. She sells fruits and other goods from a stall at her home, which fronts the country’s main north-south highway. A fetid drainage ditch sits a few feet away. She wears a mask to protect herself from the odor and the ever-present dry season dust of the road.

Manivanh is among the estimated 500,000 Laotians who will benefit from the USD128-million National Road 13 Improvement and Maintenance Project with help from the Asian Infrastructure Investment Bank (AIIB), the World Bank and the Nordic Development Fund. The Government of Lao PDR is funding USD38.5 million of the project, with AIIB financing USD40 million.

Over the next three years, a 58-kilometer (km) stretch of the dilapidated road will be renovated. Nineteen km of the highway will be expanded from two lanes to four, while the remaining 39 km will be improved.

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Today the road consists of two lanes with no centerline, no lane barriers, no pedestrian paths, little lighting and no real safety infrastructure. Traffic ranges from tour buses and container trucks to students on bicycles and even livestock—all of which mingle freely across the highway.

As Lao PDR’s primary national road, NR13 links the country to China, Thailand and Cambodia, meaning improvements along its length could spur greater regional connectivity.

“This improvement project is critical for traffic safety,” says Latsamy Aliyavongsing, project manager under Lao PDR’s Ministry of Public Works and Transport’s Department of Roads. “The road is the main backbone from north to south and this section is very important because traffic is heavy near the capital.”
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Like most people along the project site, Manivanh looks forward to the road improvements. “Many accidents happen here,” she says, as trucks and buses overtake each other at high speeds. “I am worried about business. Another nearby road project took a very long time to finish, but we need a better highway.”

Lam-ngeun Savanvilay runs a roadside noodle stall next to the spot where a bridge crosses NR13. She has lived in the area since birth.

“My house is on the other side of the bridge, and I’m receiving compensation for my shop soon,” she says. Much of Savanvilay’s restaurant will remain as it stands far enough back from the highway. She expects business—and quality of life in general—to improve once the project is completed.

Meanwhile, disabled veteran Thitkor Thipphavan lives at a dusty intersection between NR13 and a local dirt road. His sturdy, two-story concrete house is one of the few that will be removed as part of the upgrade project, as the intersection next to his home will be dramatically improved. In this regard, AIIB assisted in the preparation and implementation of the Resettlement Action Plan by effectively monitoring the resettlement process through the development of a computerized system that tracks payments to prevent construction delays.

“We already have a lot behind the house where we will build another home once the NR13 construction begins,” he says. “When the builders come, my wife and I will stay with a relative nearby. It will take about four months to build our new house. We’ll have more space then, and the area will be much nicer.”

Khemphone Sihalath, who has lived on NR13 for 70 years, owns a large house next to the road. He lives alone and has a prosthetic leg, the result of a battle with cancer.

“I’m happy to get a better road as it will benefit the district,” he says. “It will also be easier for me to get around in my wheelchair.” Sidewalks will be included in the road upgrade, greatly benefiting pedestrians traveling along the highway—including Sihalath on his wheelchair. As it is now, jagged and poorly maintained asphalt meets dirt at the side of NR13—there is no safe passage for pedestrians.

Many residents of Naxaithong District also face the problem of flooding and poor drainage during the monsoon season. This will also be addressed by the project.

“We hope everyone living along the road will benefit once it is improved,” says project manager Aliyavongsing. “We hope traffic congestion to and from the city going to the outskirts would ease, and that residents would have better access to the city, especially those who need to go to the hospital or main market.”

Kazakhstan: Wind Gives Light to Peishbek’s Farm

Fifty-five-year-old Peishbek is a farmer who lives with his brothers in the town of Zhanatas in the Sarysu District of Kazakhstan. Peishbek has a problem with electricity. His home is not connected to the power grid, so he and his brothers use diesel to power the farm. They tried solar panels, but these soon broke down shortly after installation.

Fortunately for Peishbek and his brothers, the World Resources Institute lists Kazakhstan as one of the top three countries with the highest potential for wind-generated electricity, with winds reaching speeds of 45 meters per second. This is one of the reasons why a 100-megawatt wind power plant is being built southwest of the town. The Zhanatas 100 MW Wind Power Plant is the Asian Infrastructure Investment Bank’s (AIIB) first onshore wind power project, first project in Kazakhstan and first AIIB-led cofinanced project with the Eurasian Development Bank and the European Bank for Reconstruction and Development.

The wind farm aims to provide a sustainable and environmentally friendly source of renewable energy for the region and allow Kazakhstan to meet its commitment to produce three percent of total energy from renewable sources. As part of the Kazakhstan 2050 Strategy initiative, the country aims to diversify its resource-heavy economy and transition to a green economy. Under this initiative, the government has set a goal for the share of electricity production by solar and wind to reach three percent by 2020 and 10 percent by 2030, increasing from less than two percent in 2018.

Kazakhstan’s fuel mix is fossil-heavy. Eighty percent of the country’s electricity is generated from fossil fuels, with hydropower accounting for 12 percent and less than one percent generated from solar and wind installations. The country’s power generating infrastructure is imbalanced and outdated. Almost half of the generating facilities in Kazakhstan are more than 30 years old. Kazakhstan’s electricity sector needs significant investments to rehabilitate outdated power assets and expand capacity to meet rising energy needs.

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AIIB is helping Kazakhstan reduce the project’s financing gap by mobilizing private capital and arranging the inflow of other funding sources. The total project cost is USD136.2 million. AIIB’s loan is USD46.7 million, sponsors will provide USD40 million in equity while the rest will be funded by other financial institutions. This project will increase the Bank’s investment in solar and wind energy by 22 percent and installed capacity by 20 percent (as of December 2019).

AIIB has been promoting higher environmental and social standards with the project with in-depth stakeholder engagement, a detailed flora and fauna monitoring report and archeological survey, among others. Seven farmers, several local officials and the public governance councilor gathered at the Zhanatas community hall for the first public meeting about the wind farm construction. Concerns raised were more about archaeological surveys, local employment and the wind power plant’s impact on the environment and pastures. No other comments or grievances were expressed at the meeting and over the consultation period.

When the 3D model of the wind farm was examined by stakeholders, they did not express concerns over the 150-meter-tall wind turbines ruining the view of the horizon. Peishbek was more concerned about and interested in livelihood and energy source opportunities. During consultations, other stakeholders—such as those from the villages of Burkitbayev and Ushbas—mentioned that the turbines might even become a local attraction, something to be proud of.

Later during the course of project preparation, it was decided that the majority of construction workers involved in civil works would be sourced from Zhanatas. Preparations were made for service provision and permanent positions to be advertised in the local community during the operational phase.

Once completed, the Zhanatas wind power plant will become the largest wind farm in Central Asia. Greenhouse gas emissions can be avoided—about 260,623 tons of carbon dioxide equivalent per year. More importantly, Kazakhstan stands to generate clean electricity, approximately 319 GWh per annum or 0.3 percent of total electricity generation in the country, benefiting people like Peishbek and his farmer brothers.

Continuing to Improve Living Conditions
Read more stories about our investments in Egypt, India, Indonesia and Turkey and how we help clients provide better living conditions to communities.

External Stakeholder Outreach

In 2019 we continued conversations with external stakeholders and people who, one way or another, are affected by our investments. We continue to do it from top to bottom: our Board of Directors go to the field to have face-to-face conversations with clients, project implementing entities and beneficiaries. Our staff visit project sites to ensure project adherence to our environmental and social safeguards or work with local communities and organizations to understand the situation on-the-ground so that issues could be addressed.

We remain a transparent organization and keep our communication channels open for the public—whether it’s to solicit feedback and discuss one of our strategies, request information about AIIB, report suspected fraud or corruption or address concerns from people affected by our investments.

On March 31, 2019 the Project-affected People’s Mechanism (PPM) entered into effect. The PPM is further guided by our Directive on the PPM and Rules of Procedure of the PPM and overseen by our Complaints-resolution, Evaluation and Integrity Unit. The PPM is a mechanism to provide an opportunity for an independent review of submissions from project-affected people who believe they have been or are likely to be adversely affected by AIIB’s failure to implement its Environmental and Social Framework. More details about the PPM and instructions on submitting a request can be viewed in our PPM page that went live on Dec. 10, 2019.

We do these because we acknowledge that we need to be on the ground and have our ears to the ground. We will continue feeling the pulse of people impacted by our investments.