Since its establishment in 2016, the Asian Infrastructure Investment Bank (AIIB) has made major progress towards becoming a key financing partner for sustainable infrastructure in Asia. Over the years, AIIB has actively updated and adopted its Board-approved environmental and social safeguards into all its investment operations to strengthen AIIB’s commitment to climate financing, use of environmental, social and governance approaches in capital market operations, disclosure and transparency, gender equality and protection of biodiversity and ecosystems. As of end-2022, AIIB has invested over USD38 billion across 202 projects in 33 Members. The 2022 Sustainable Development Bonds Impact Report documents AIIB’s major efforts toward sustainability in 2022 and how it supported the sustainable development of our Members in an ever-changing post-pandemic environment.

Climate change-related events place millions of people and vulnerable economies at risk. To overcome and mitigate future challenges, it is important to promote clean energy investments in Asia to ensure shared prosperity. In November 2022, AIIB’s Board of Directors approved an update to the Energy Sector Strategy (ESS). The updated ESS sets even stricter exclusions and limitations on our Bank’s financing of fossil fuels. In particular, an all-out ban is imposed on coal: thermal coal mining, coal-fired power/heating plants, and projects that are functionally related to coal (as defined in the ESS) are explicitly excluded from AIIB’s financing. This revised strategy reflects the transformational change in the global energy landscape, driven by ambitious global, regional and national goals to shift to a low- or zero-carbon energy system. The update reflects AIIB’s commitment to support Members’ energy transition by prioritizing renewable energy, energy efficiency, and support of infrastructure and technology development in alignment with the goals of the Paris Agreement by July 1, 2023. So far, AIIB’s energy sector projects approved by 2022 are expected to avoid 19.2 million tons of carbon dioxide equivalent of greenhouse gas emissions per year.

What happened in 2022 served as a stern warning that climate change is exacerbating rather than slowing down. The aftermath of the climate crisis is ever more evident and devastating. AIIB, along with other multilateral development banks (MDBs), issued a joint statement at the COP27 global Climate Change Conference in Sharm El Sheikh, Egypt to support low to middle-income countries seeking financing to mitigate climate change and adapt to the consequences of a warmer planet. This embraces AIIB’s vision, mission and goals established in the Bank’s 2020 Corporate Strategy and honors commitments made toward climate finance–with the goal of climate finance making up 50% of AIIB's annual financing approvals by 2025. In 2022, AIIB approved 42 projects amounting to USD6.8 billion. Of the total approved volume,1 56% involved climate finance with 81% and 19% of the amount split towards climate mitigation and climate adaption, respectively.2 This is a tremendous achievement that places AIIB on the right path towards achieving portfolio-wide targets under our Corporate Strategy.

Due to political and economic uncertainties caused by energy insecurity, geopolitical tensions and persistent inflation, private investors have become more circumspect about investing in infrastructure projects in developing countries. Despite the turbulence experienced in 2022, the Bank has deepened its engagement with the private sector. For example, we have enjoyed increased interest from private investors to participate in our issuance of infrastructure asset-backed securities. Since its establishment seven years ago, AIIB has mobilized USD7.1 billion in private capital toward sustainable infrastructure.3 To reach the scale of financing required to meaningfully address the infrastructure financing gap, calls for international support to mobilize funds from all sources. We will continue to provide Members with tailored financing solutions that support the development of infrastructure asset markets, and continuously promote the channeling of capital towards Paris-aligned investments.

There is no doubt that the task ahead is formidable. Inflation continues to put pressure on fiscal budgets of developing countries, while energy, commodity prices and food shortages remain causes of concern for many of our Members. In such an environment, we will ramp up our efforts to tackle complex challenges in the course of achieving the goal of green, inclusive and sustainable growth in our Members. This report shows how we at AIIB, together with our partners and stakeholders, are doing our part to finance the Infrastructure for Tomorrow. Our work in 2022 was an important step forward in establishing a resilient and sustainable future for all our Members.

Jin Liqun
President and Chair of the Board of Directors

The Impact Report is a critical tool for communicating the impact of AIIB’s Sustainable Development Bond investments to our investors. As the world adjusts to a new reality following the coronavirus disease (COVID-19) pandemic, the responsibilities of multilateral development banks as issuers of and investors in financial products and providers of bond data, have become even more important. We take this opportunity to communicate our reporting approach, efforts and accomplishments in 2022 towards our goal of financing Infrastructure for Tomorrow in Asia and beyond.

Last year was a challenging one for the world with geopolitical tensions, the climate crisis, energy shortages and market instability. It will take more than just traditional green investments to achieve our net zero targets by 2050. The global community should promote holistic approaches with the goal of achieving sustainable economic growth for all, while keeping emissions under control. The AIIB Sustainable Development Bond Framework (The Framework) is at the forefront of AIIB’s mission. The Framework covers not only green investments that contribute to climate mitigation and adaptation, reduce local air pollution and support biodiversity conservation, but also social and sustainable infrastructure investments in education, digital technologies, public health, rural development and urban environments. In 2022 alone, over USD7 billion of sustainable development bonds were issued by AIIB, showcasing its contribution to narrowing the gap between capital markets and sustainable infrastructure development.

AIIB recognizes that long-term economic development and environmental sustainability go hand in hand. In 2022, Members received climate financing support in areas such as mainstreaming nature-positive action to protect biodiversity and combat the effects of climate change. Of all projects approved in 2022, nearly 60% aligned with United Nations Sustainable Development Goal 13 (SDG 13): Climate Action. This reflects AIIB’s commitment to sustainable development and to ensure all of AIIB’s financing activities align with sustainable development objectives. In December 2022, AIIB received an award for the ‘Best Sustainability Panda (CNY) Bond’ at the Asset Triple A country awards. In 2022, AIIB also completed its first Georgian Lari (GEL) transaction. This is the Bank’s first onshore local currency issuance of a matching local currency bond.

Since the first Sustainable Development Bond Impact Report was released in 2021, the Bank has continued to make enhancements to its reporting practices to meet the requirements of our investors. This year’s report discloses the percentage of climate finance of total project financing and the Sustainable Development Goals mapping for all projects with initial disbursements in 2022. It also includes an analysis of the economic impacts generated following the completion of AIIB’s transportation project in the rural region of Gujarat, India. In order to provide insight into the impact of AIIB’s nonsovereign projects, the report includes a deep dive of the Bank’s investment into Tata Cleantech Capital Limited. I am pleased to share our third AIIB Sustainable Development Bond Impact Report, highlighting the Bank’s contributions to building a more resilient and sustainable future.

Domenico Nardelli
Treasurer