The year 2020 marks the Asian Infrastructure Investment Bank’s (AIIB) fifth year of operations and the last year of our start-up phase. By the end of our fifth year, we will have completed the development of our core governance frameworks, policies, sectoral strategies and basic financing products. By then, we will also deliver the mechanisms to monitor and evaluate our progress in terms of implementation and results. We will continue to expand our operations based on robust multilateral governance, high standards and sound banking principles.

Asia is the world’s largest and fastest growing region with 60 percent of the world’s population and 45 percent of the global economy. Asia’s role in bridging people, goods, services and markets worldwide is becoming more pronounced. We will maintain a strong focus on Asia and continue to build our core competency in the region. We will develop tools to better serve our presently underserved regional members that are currently at relatively lower per capita income levels. We also recognize the key role our nonregional members play to address climate change and further Asia’s development. As such, we’re expected to gradually build capacity to deliver projects to nonregional members within the principles and limits defined under our Strategy on Financing Operations in Non-regional Members.

We are growing, but we’re doing so prudently. In 2020 we will begin working from our permanent headquarters while recruiting staff in alignment with the Bank’s objectives. Our workforce will have an improved mix of skills and we will continue to promote a diverse and inclusive workplace. We will endeavor to stay lean by promoting effectiveness with a focus on client and shareholder value.

In 2020, we will implement our Strategic Staffing Plan to expand our talent pool and support the Bank’s growing needs. Our ability to recruit, develop and retain a team of high-caliber staff will remain critical to our development. We will also enhance our suite of training programs to equip our staff with sufficient technical capabilities.

By end-2020, we will have completed the first election of our President and the first review of the Bank’s capital. By end-2022, we will have conducted the first review of our Accountability Framework and Oversight Mechanism, both of which came into effect in 2019.

As we’ve experienced in the last four years, our clients’ infrastructure needs are growing. To respond to this demand, we need to deepen our capabilities in promoting economic, environmental and social sustainability in the projects we finance. This will allow us to support projects of higher operational complexity and focus on quality. To be able to respond to client demand, we need to broaden our product offering.

With the approval of the water sector and digital infrastructure strategies expected in 2020, we will have completed the development of our key sectoral strategies covering the main domains of infrastructure and the majority of AIIB’s investments. We will thus shift our focus from the development of these sectoral strategies to their actual implementation to support our business development and investment operations.

We also intend to conduct subsectoral, regional, national and thematic analyses to determine which subsectors present new business opportunities for the Bank, which geographical areas present opportunities for cross-border connectivity or which thematic priority needs to be enhanced.

Along with other MDBs, we committed to ensure that our internal operations (including corporate services, our office building, facilities and internal policies) are in line with the objectives of the Paris Agreement. In 2020, we will begin developing a broader Institutional Carbon Management System aimed at reducing carbon emissions related to our building facilities, corporate procurement, business travel and waste management. Our sustainability efforts will be reinforced by our location to the new eight-hectare permanent headquarters which, in 2019, was awarded the LEED Platinum certification and the Three-Star Green Building Certification (respectively, the highest ratings internationally and in China). We will also continue our Act Green Together initiative to improve the environmental sustainability of our events. All these measures reflect our commitment to AIIB’s Green core value.

Our Environmental and Social Framework (ESF) underpins our efforts to integrate high environmental and social standards in AIIB operations. We are conducting a review of the ESF based on experience gained from the application of the policy to AIIB projects during our first years of operations.

A diverse list of shareholders is being consulted during the review. These include internal consultations (Management, the Board of Directors, AIIB staff and our Complaints-resolution, Evaluation and Integrity Unit), consultations with clients and partners (member governments, development partners, public and private sector clients, project beneficiaries and project-affected people) and consultations with external organizations (United Nations organizations, organized labor, indigenous peoples’ organizations, think-tanks, civil society and nongovernment organizations, academia, gender and disability organizations and human rights organizations).

We proposed the ESF’s review to the Board of Directors in 2019 and expect the process to be concluded in 2020 as we continue to live and enhance our “Green” core value.

The volume of investments in infrastructure in Asia is expected to grow bigger. Consistent policy support and strong economic fundamentals in many of our members are enabling the growth of bankable projects. Demand for sustainable infrastructure is also on the rise, driven by increasing environmental and social awareness. We’re finalizing our sectoral strategies to take advantage of these opportunities. We’re also exploring the use of technology in enhancing project quality (such as the use of drones at project sites, software analytics and the internet of things) as transformative tools for infrastructure development.

By 2025, Asia’s demand for infrastructure (excluding China) is expected to reach USD1.2 trillion. Even in the event of a recession, the demand will still be in the area of USD950 billion. The infrastructure development market is huge—a market of players with many commonalities—so much so that differentiating factors may spell the success or failure of international financiers. It is thus imperative for AIIB to differentiate itself and establish its market position.

The global macroeconomic outlook is becoming more uncertain. Borrowers are suffering from weaker repayment ability, and lower infrastructure spending could negatively affect our long-term business outlook. A challenging economic environment may also squeeze market liquidity, lowering our ability to raise funds on the most favorable terms from the capital market. It may also pose a challenge to our ability to mobilize private capital for our projects.

The COVID-19 pandemic affected everyone and the mid- to long-term repercussions are still unknown. It is our role to step up our efforts to provide countercyclical lending to keep our members fiscally on track during times of uncertainty. Once the COVID-19 crisis is over, AIIB will need to quickly refocus on its mainstream operations in assisting developing members to invest in high-quality infrastructure for development.

In addition, we recognize that countries with fragile infrastructure have less capacity to handle health crises. This is where infrastructure investment—including in public health, healthcare, sanitation and information and communications technology—should be scaled up to better serve our members. We have a responsibility to our members who face tremendous pressure to maintain the health and safety of their citizens while managing the impact of an economic downturn. It is our duty to be adaptive, flexible and responsive in times of crises so our members can continue investing in these kinds of infrastructure.

In 2020, we intend to increase high- and working-level outreach and consultations, with the objective of developing our project pipeline through business development and country programming in several members. We intend to conduct high-level follow-up discussions with our members where dialogues have already been initiated, with the objective of finalizing country programming memos for those members. If necessary, we will tailor approaches to respond to clients’ needs to maximize development impact, including solutions through new products.

We also intend to deploy additional necessary resources to better attend to AIIB’s cofinancing cooperation, as well as nonregional and new-entry clients.

We will expand the use of our Project Preparation Special Fund by refining its focus, targeting outreach and improving disbursement efficiency. We will serve a broader range of members, prioritizing presently underserved regional members that are at relatively lower per capita income levels. While retaining its primary focus on Asia, AIIB will also gradually increase support to nonregional members through collaboration with other development and cofinancing partners.

We will create an institutional culture that reinforces our ambition to become a 21st century MDB characterized by client responsiveness, innovative and efficient practices, good governance and accountability.

In December 2019, we announced to staff a new organizational structure designed to better integrate and coordinate our client engagement and business development efforts.

Effective Jan. 1, 2020, the Investment Operations Department was divided in two departments, each with a regional focus and each under a Vice President handling client relations, technical specialists and bankers. Region 1 covers Southeast Asia and South Asia (except Pakistan and Afghanistan). Region 2 covers Pakistan, Afghanistan, Central Asia, East Asia, West Asia, Europe, Africa and Latin America. The Implementation Monitoring Unit now has a dual reporting role to both Vice Presidents and the Client Relations and Programming Office evolved into two independent units, consolidating into each of the Investment Operations Departments.

A new Operational Services Department will be comprised of environmental specialists, social specialists, procurement specialists and financial managers. The Director General for Operational Services will also have a dual reporting role to both Vice Presidents for Investment Operations.

This structure will enable us to better utilize the talent we have in AIIB and give us flexibility to meet client demand as we scale up our investment program to meet the needs of our members.

Not often is a new MDB born, and we’re learning fast even during our early years. We will finish our fifth year of operations after this year, and we’re gearing up for the next years to come.

We will strive to become recognized as a focused financier with deep expertise and agility to respond to client demand. We will work hard to become more client-oriented.

We will continue to mobilize substantial additional investment through our own resources while maximizing partnerships. We see ourselves gradually expanding our services to include support for project preparation and implementation and support for the development of infrastructure as an asset class.

We will strive to become recognized as an organization characterized by an accountable management, lean practices, a growth mindset and continuous learning in line with our Cultural Attributes. We want to become an attractive employer for high-performing and innovative staff.

All this as we complete our start-up phase, as we end our fifth year of operations. We will continue to enable our clients so that they could build tomorrow’s sustainable infrastructure in different sectors that face huge funding gaps. By doing so and by doing a good job, we will build better relations with our clients. The infrastructure they are building will better connect people, services and markets. Our clients are enabling communities, beneficiaries and people. To do more. To be better.

This is our contribution. This is how we will fulfill our mandate and grow our business. Over time, our clients will build a better future, one that will impact the lives of billions in Asia and beyond.