Frankfurt, Germany, June 24, 2016
AIIB's Board of Directors Approves $509 M Financing for its First 4 Projects: Power, Transport and Urban: Investments span South, Southeast and Central Asia
The Asian Infrastructure Investment Bank’s Board of Directors today approved its first 4 loans totaling $509 million to finance 4 projects. Three of the 4 projects are co-financing operations with multilateral development bank (MDB) partners. The approved loans are:
· a $165 million loan for a Power Distribution System Upgrade and Expansion Project in Bangladesh;
· a $216.5 million loan for a National Slum Upgrading Project in Indonesia, expected to be co-financed with the World Bank;
· a $100 million loan to finance the Shorkot-Khanewal Section of National Motorway M-4 in Pakistan, co-financed with the Asian Development Bank (ADB) and the United Kingdom’s Department for International Development (DFID); and
· a $ 27.5 million loan for the Dushanbe-Uzbekistan Border Road Improvement Project in Tajikistan, co-financed with the European Bank for Reconstruction and Development (EBRD).
AIIB’s President Jin Liqun noted, "I am delighted to announce that AIIB’s Board of Directors has today – just six months after the Bank’s inauguration -- approved the first group of loans. These projects, which span the energy, urban development and transport sectors, will help to bridge the region’s critical infrastructure financing gap and strengthen regional connectivity. We are very pleased that three of these projects are joint co-financing operations with our development partners, ADB, EBRD and the World Bank. This has been an outstanding and tangible demonstration of multilateral cooperation that has expanded the pool of financing available to our joint member countries. We are working on a number of additional projects and look forward to bringing them to our Board for its approval later this year."
The Bank’s Vice President and Chief Investment Officer, DJ Pandian, welcomed the new investments noting, "The Bank places tremendous importance on ensuring that its investments lead to positive results and measureable outcomes for its clients and will improve the lives of the millions of people in the different regions of Asia."
The Bank, which supports infrastructure development and regional connectivity in Asia, is targeting lending of approximately $1.2 billion in 2016.
Brief details on the 4 projects are provided below. Additional details on these, and upcoming projects may be found at www.aiib.org
A $165 million loan to People’s Republic of Bangladesh for a Power Distribution System Upgrade and Expansion Project is designed to expand electricity coverage by providing 2.5 million new service connections in rural areas, and to upgrade two grid substations and convert 85 circuit-km overhead distribution lines into underground cables in northern Dhaka. The Project will supplement the Bank’s development partner efforts by providing additional financial resources to connect more rural and urban consumers, further reduce distribution losses, and improve the quality and reliability of power supply in Bangladesh. The Project, upon completion, is expected to benefit about 12.5 million people in rural areas and therefore create a significant and sustained impact on many economic and social dimensions of rural development in Bangladesh.
A $216.5 million loan to the Republic of Indonesia for a National Slum Upgrading Project aims to improve access to urban infrastructure and services in targeted slums in Indonesia. This financing supports the Government’s program of urban slum infrastructure investment in the central and eastern parts of the country. The project will finance institutional strengthening and capacity building for the responsible ministries and agencies and sub-projects will support primary and secondary infrastructure improvement and site development, and select construction. The project also provides contingency financing for disaster response. Direct and indirect beneficiaries of the project are expected to include 9.7 million slum dwellers living in 154 cities. Slum dwellers are likely to experience significant betterment of living conditions due to improvements in access to urban infrastructure and services. The Project is expected to be co-financed by the World Bank which will be the lead co-financier.
A $100 million loan to the Islamic Republic of Pakistan supports the construction of the last remaining section (Shorkot-Khanewal) of National Motorway M-4 in Punjab province. The 64 km four-lane, controlled access segment will enhance connectivity, and provide a more efficient, cost-effective and safer transport route connecting Islamabad, Faisalabad, and Multan. When this project is completed, the entire M-4 will be fully operational. The M-4 Motorway forms a part of the north-south transport corridor that links Pakistan’s main centers of economic activity, from Torkham, on the northern border with Afghanistan, to the port city of Karachi. The project is co-financed with a $100 million loan approved by the Asian Development Bank's (ADB) Board of Directors. The United Kingdom's Department for International Development (DFID) is providing a $34 million equivalent grant for the project. As lead co-financier, ADB will administer the ADB and AIIB loans and the DFID grant.
A $27.5 million loan to the Republic of Tajikistan for the Dushanbe-Uzbekistan Border Road Improvement Project is designed to increase connectivity and mobility along the Tajikistan section of the Central Asia Regional Economic Cooperation Corridor 3, a vital trade corridor, through the rehabilitation and upgrade of the 5 km section of the road connecting Dushanbe to the border with Uzbekistan, from the Avicenna Monument to the West Gate in Dushanbe. The project will help increase national and regional trade, reduce traffic congestion and improve road safety. It is co-financed with the European Bank for Reconstruction and Development (EBRD) as lead co-financier with a $27.5 million loan.
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