The Asian Infrastructure Investment Bank (AIIB) has clarified that its investment in the Indonesia Mandalika Urban and Tourism Infrastructure Project (Mandalika Project) is in compliance with environmental and social standards.
Urjit Patel, AIIB’s Vice President for Investment Operations in South and Southeast Asia, said, “Since the concerns were first raised in 2019, AIIB has shown following due diligence that complaints were largely not related to the Mandalika Project but rather to the nearby MotoGP Circuit, which is a separate Project and not financed by AIIB.”
Patel emphasized that the Mandalika Project is designed to provide sustainable core infrastructure to develop the southern region of Lombok as a tourist destination and stimulate local business and create employment for the community. Tourism makes a major contribution to the country’s GDP, but requires supporting infrastructure such as roads, water and sanitation services, solid waste management, power distribution, disaster risk management, landscaping and community facilities—investments that will also benefit the community.
Since approval of the Mandalika Project, AIIB has closely monitored implementation by its client, the Indonesia Tourism Development Corporation (ITDC), of the Bank’s Environmental and Social Framework.
With support from AIIB, ITDC has worked with affected communities while preparing the Project to avoid, minimize and/or mitigate potential adverse impacts. The resettlement action plan for the affected local community includes the provision of larger homes for those resettled. Project-affected people are being given the opportunity to own both the house and the land. Skill development and trainings as well as jobs are being provided for the affected people. Market lots for local vendors, micro, small and medium enterprises and community facilities within the Mandalika Special Economic Zone have been set aside as part of the plan.
AIIB notes that the Mandalika Project, like any other infrastructure development, is a complex undertaking but the Bank remains committed to working with its partners and stakeholders, so that everyone can participate in and reap the benefits the Project is anticipated to bring.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 106 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Working with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.