COVID-19 Crisis Recovery Facility

Introduction

The Asian Infrastructure Investment Bank (AIIB) has created a Crisis Recovery Facility to support AIIB’s members and clients in alleviating and mitigating economic, financial and public health pressures arising from COVID-19.

Availability

Over the next 24 months (April 2020 to April 16, 2022)1, the Crisis Recovery Facility will offer up to USD13 billion2 of financing to both public and private sector entities in any AIIB member facing, or at risk of facing, serious adverse impacts as a result of COVID-19.

Types of Projects the Facility Will Consider

The Facility is designed to be flexible and adaptive to emerging demand. This includes:

  • Financing of immediate health sector needs. This financing could support needed emergency public health responses, including the development of health system capacity, and provision of essential medical equipment and supplies to combat COVID-19 as well as long-term sustainable development of the health sector. Vaccine financing is also eligible for AIIB financing, where vaccine financing projects can comprise both vaccine purchase and vaccine deployment (e.g., distribution, delivery, strengthening of supporting healthcare infrastructure and systems).
  • Economic resilience. To mitigate the economic impact on AIIB members’ economies, the Bank could provide financing to supplement government productive expenditures to support the social and economic response and recovery. This includes not just investments in infrastructure but also social and economic protection to prevent long-term damage to the productive capacity of the economy. It could also protect and restore productive capital, including human capital.
  • Financings to address liquidity constraints for clients in infrastructure and other productive sectors. This could help address liquidity constraints and maintain critical long-term investments that may have to be curtailed, delayed or suspended in the absence of AIIB financing.

Types of Financing the Facility will Deploy

Financings under the Facility will apply AIIB’s regular financing terms and risk criteria.

The Facility can use any existing AIIB instruments but may consider others as deemed appropriate, including:

Sovereign-backed or nonsovereign-backed financing for regular investment projects

  • This includes traditional financings that can be closed within 24 months.
  • It also could include lines of credit to financial intermediaries under sovereign-backed or nonsovereign-backed financings.
  • These could focus on the provision of working capital and liquidity support to the borrowing banks’ clients.

Additional sovereign-backed or nonsovereign-backed financing to add to ongoing operations

  • Build on existing client relationships and project structures.
  • Faster disbursement of funds and scaling-up activities that respond to COVID-19 challenges through expanded retroactive financing, increased AIIB financing for given projects and scope expansion.
  • Additional financing could also be provided for projects financed by other development partners.

The World Bank’s Program-for-Results (PforR) and the Asian Development Bank’s Results-based lending (RBL)

  • These instruments are particularly suitable for financing government programs consisting of a large number of smaller expenditures.
  • Typical in the social sectors and local access to infrastructure services.
  • The AIIB may cofinance such operations under sovereign-backed financings in accordance with the policy framework of the respective peer institution, in lieu of AIIB’s Environmental and Social Policy and Procurement Policy.

Policy-based financing

  • The Bank shall provide policy-based financing only in the form of cofinancing with the World Bank, and the Asian Development Bank, where the Bank applies the World Bank’s Policy on Development Policy Financing, or the Asian Development Bank’s Policy on Policy-based Lending, in lieu of the Bank’s operational policies, including the Bank’s Operational Policy on Financing, the Environmental and Social Policy and Procurement Policies.

Approval Process

Approvals will be based on AIIB’s current procedures.

AIIB Special Fund Window Under the COVID-19 Crisis Recovery Facility

As the COVID-19 pandemic has become more globally widespread and severe, lower-income countries have also become particularly vulnerable to its impact. AIIB has established the Special Fund Window (SFW) under the COVID-19 Crisis Recovery Facility to provide interest rate buy-down for eligible sovereign-backed financing for lower-income members.

For the latest criteria and procedures for accessing the Fund, please refer to the Replenishment Paper and the Rules and Regulations. For previous features of the Fund, please refer to this Paper.

Eligible Fund recipients should consult with the Project Team Leader of the project that is being put forward.

Additional Information

The following documents provide additional information about AIIB’s COVID-19 Crisis Recovery Facility:

To learn more about COVID-19’s implications for infrastructure development and financing markets, both in the near term and long term, visit COVID-19 Economic and Infrastructure Insights.

Key Contacts

For additional information about the COVID-19 Crisis Recovery Facility please send an email to crf@aiib.org




1 On June 24, 2021, the AIIB Board of Directors approved the extension of the duration of the COVID-19 Crisis Recovery Facility from Oct. 16, 2021 to April 16, 2022.
2 In July 2020, the Facility size was increased from USD5-10 billion to up to USD13 billion.

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