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.
Knowing Our Clients
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.
Serving Our 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.
Graduating from Start-Up
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.
Enabling Our Clients to Enable People
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.