Many of us have a built-in desire for a better quality of life. This means accessible physical, digital and other social infrastructure. AIIB, its members and clients work together to finance infrastructure development, turning aspirations into reality. A major accomplishment of 2020 was aligning AIIB’s shareholders and team around a new vision, mission and strategic direction that will enable the Bank to live up to these aspirations.

“What kind of multilateral development bank will AIIB become?” has been asked since the Bank was just a concept in 2013. From the rich menu of development finance approaches the multilateral development bank family was offering, which one would AIIB follow? Would AIIB adopt a model distinctly different from that of its peers?

In 2018, we began developing the Corporate Strategy, aiming to finalize it in 2020 so that we could begin implementing it in 2021, the fifth anniversary of AIIB and the completion of our start-up phase.

We reached out to a broad set of external and internal stakeholders to exchange ideas on possible future directions for the institution. Shareholders reaffirmed their preference for AIIB to continue embracing the strong foundations that have contributed to its success. Formal Corporate Strategy discussions started in mid-2019 and AIIB staff established 10 focus groups on topics relevant for the Bank’s future. Discussions resulted in valuable recommendations.

The 2019 Board of Governors meeting was a critical point. Through a dedicated session on the Corporate Strategy, AIIB Governors shared their vision for future strategic directions, underlining the relevance of the Bank’s thematic priorities and highlighting the growing importance of technology to meet client needs. The event provided an opportunity to receive feedback from the Bank’s International Advisory Panel.

The Board of Directors met in September and December 2019 to further discuss the Corporate Strategy. The discussions not only provided guidance but also encouraged dialogue on how ambitious our strategic directions should be. Thus, the draft Corporate Strategy highlighted the importance of remaining flexible to respond to immediate client needs and to adapt the strategy to extraordinary situations that might occur during the 10-year strategy period.

The Corporate Strategy took its final form after feedback from the Board of Governors during the 2020 Annual Meeting and from the International Advisory Panel. The document was approved by the Board of Directors in September 2020 with strong support.

2021 will be the first year that our operations will be guided by the Corporate Strategy. It will be reviewed in 2025 to see if we should continue financing Infrastructure for Tomorrow.

It has never been more urgent to imagine, plan and build Infrastructure for Tomorrow. Five megatrends are colliding to fundamentally reshape our world. First, increasing urbanization will expand the need for urban infrastructure. Second, demographic shifts will have significant implications for public service and social infrastructure and for more inclusive and accessible infrastructure services. Third, climate change and sustainability considerations will need to underpin investments across multiple sectors. Fourth, digital infrastructure and technological innovation are becoming more central to the economy and influencing user expectations and behavior, which will impact infrastructure demand. Fifth, regional trade and value chains will be increasingly more relevant.

We are already witnessing the influences of these five megatrends on infrastructure development in Asia, even though their full effects are still far from playing out in full. Asian economies must find ways to meet their growing and changing infrastructure needs under challenging conditions. Investing in forward-looking infrastructure at scale is the key bridge between today and a more sustainable and prosperous tomorrow. As articulated in our Corporate Strategy, Financing Infrastructure for Tomorrow is AIIB’s mission. We will prioritize investing in infrastructure and other productive sectors that add value through one of the four crosscutting themes of Infrastructure for Tomorrow: green infrastructure, connectivity and regional cooperation, technology-enabled infrastructure and private capital mobilization.

Climate change is one of the most pressing global challenges of this century. To steeply reduce global emissions and to adapt to climate change, infrastructure needs to be green. As a major contributor to global greenhouse gas emissions, Asia must take a sustainable development pathway to achieve the Paris Agreement objectives. Environmental improvement is key for the future of Asia as it is expected to be hit hard by climate change and environmental degradation if trends continue. The situation calls for substantial investments in green infrastructure. The increasing commitment of AIIB’s members to adapt to and mitigate the impact of climate change and solve local environmental problems has reinforced the Bank’s need to focus on green infrastructure.

Consistent with our mandate, we will continue to prioritize green infrastructure and help our members meet their environmental and related development goals by financing projects that improve the local environment and investments dedicated to climate action.

In 2020, we invested, directly or indirectly, in projects that promote energy access and security. We increased the availability of renewable power generation capacity, which helped reduce the carbon intensity of energy supply and dependence on fossil fuels to generate electricity. Finally, we helped AIIB members move to a more balanced and environmentally sustainable energy mix. Some of the projects follow:

• A transmission grid in Bangladesh, which will improve the reliability and efficiency of power transmission in Dhaka and the Western Zone and strengthen the institutional capacity of the Power Grid Company of Bangladesh. To mitigate climate change–related issues such as flooding and overheating of transmission lines, the project will feature indoor gas-insulated substations and high-efficiency, high-temperature and low-sag conductors.
• The first and largest utility-scale solar project in Oman, with a total capacity of 500 megawatts (MW), to help diversify Oman’s energy mix and meet increasing demand for power brought about by sustained economic and population growth and the expansion of heavy industry.
• A solar project in India being developed by a special-purpose vehicle. The project will add 250 MW of solar capacity—equivalent to about 519,776 tons of annual CO₂ emission savings in its first year of operations in 2022—and help India meet its overall renewable energy capacity target.

AIIB’s support helps bridge the financing gap for projects with significant needs that cannot be met entirely by domestic banks or partner financing agencies, including multilateral development banks. Our participation strengthens project compliance with international standards for environmental and social safeguards.

Our support contributes to the greening of transport by promoting low-carbon transport models and incorporating climate-resilient design into our transport projects. Some green transport projects we approved in 2020 were

• Izmir Metro Phase 4: Fahrettin Altay–Narlidere Kaymakamlık Line in Türkiye.
• Delhi-Meerut Regional Rapid Transit System Project in India.
• Sylhet–Tamabil Road in Bangladesh.

We are financing solutions to develop sustainable cities and improve livability. As more cities become engines of economic growth and hubs of trade, city residents must contend with inadequate access to water and sanitation, unreliable power supply, traffic congestion, air and water pollution and a lack of decent shelter, especially for low-income groups. We recognize that sustainable development of cities requires balanced integration of many economic, financial, environmental and social considerations. Thus, we are investing in projects that protect and increase environmental sustainability (pollution reduction, climate mitigation, conservation and sustainable management of natural resources and biodiversity).

Our projects in this area include the following:

• Helping the Government of Maldives develop a sustainable regional solid waste treatment system in Greater Malé. The project will ensure the safe disposal or recycling of waste, thereby reducing greenhouse gas emissions more than do landfills and generating electricity by turning waste to energy.
• Working with the World Bank on two water and sanitation projects in Bangladesh (Dhaka Sanitation Improvement and Rural Water, Sanitation and Hygiene for Human Capital Development Project).
• Helping the Government of Uzbekistan provide the Bukhara Region with access to safely managed water and sanitation by constructing and rehabilitating intakes, main water lines, water treatment facilities, pumping stations and distribution networks.

We are committed to supporting our members’ efforts to ensure the availability and sustainable management of water and sanitation for all, in line with the Sustainable Development Goals. 2020 saw the approval of our Water Strategy, which classifies investments as (1) improving access to water services, (2) increasing the availability and quality of water through improved resource management and (3) improving resilience to the impact of water-related disasters. These investments will be guided by AIIB’s mandate and thematic priorities and the following principles: (1) promoting sustainable infrastructure, (2) integrating resource management, (3) mobilizing private capital and efficiencies and (iv) adopting innovative technology.

Finally, we are investing in financial intermediaries that will, in turn, invest in subprojects that meet AIIB’s eligibility criteria and investment guidelines for green investments. Our participation in the ADM Capital [Elkhorn] Emerging Asia Renewable Energy Fund as an anchor investor will help mobilize private institutional capital that will provide small and medium-sized enterprises in emerging Asia with access to financing so they can continue to pursue renewable energy and energy-efficiency solutions.