Asian Infrastructure Investment Bank (AIIB)

In News 

• Former Reserve Bank of India (RBI) governor Urjit Patel has been appointed as a vice-president of the Asian Infrastructure Investment Bank (AIIB).
  • He will be one of the five vice-presidents of the AIIB with a three-year tenure.

About Asian Infrastructure Investment Bank (AIIB)

• China’s leader Xi Jinping first proposed an Asian infrastructure bank at an APEC summit in Bali in 2013. 
• AIIB began operations in 2016 with 57 founding Members (37 regional and 20 nonregional). 
• Members: It has 105 members and is open to accepting additional members.
  • India is a founding member.

• It is a multilateral development bank with a mission to improve social and economic outcomes in Asia and beyond.
• Shareholder & voting right:
  • China is the largest shareholder of the bank with 26.06 per cent voting rights.
    •  India is the second-largest shareholder with 7.5 per cent followed by Russia at 5.93 per cent and Germany at 4.5 per cent.
• HQ: Beijing, China.
• Structure: The bank is headed by a Board of Governors composed of one Governor and one Alternate Governor.
  • All powers of the Bank are vested in our Board of Governors, which is the highest decision-making body under our Articles of Agreement.
  • The bank staff is headed by a President who is elected by AIIB shareholders for a five-year term and is eligible for re-election once. 
    • The President is supported by Senior Management including five Vice Presidents for policy and strategy, investment operations, finance, administration, and the corporate secretariat and the General Counsel.
• Goals: To foster sustainable economic development, create wealth and improve infrastructure connectivity in Asia by investing in infrastructure and other productive sectors.
  • To promote regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions.

• Priorities: 
  • The bank’s priorities are projects that promote sustainable Infrastructure and support countries that are striving to meet environmental and development goals. 
  • The bank funds project linking countries in the region and cross-border infrastructure projects for roads, rail, ports, energy pipelines and telecoms across Central Asia and maritime routes in South East and South Asia and the Middle East. 
  • The bank’s priorities also include private capital mobilization and encouraging partnerships that stimulate private capital investment such as those with other multilateral development banks, governments, and private financiers.

India and AIIB 

• India is a founding member of AIIB with the second-highest voting share after China. 
•  AIIB has approved 28 projects in India, with a total amount of USD6.7 billion.
  • The energy and transport sectors have received the highest amount of AIIB’s financing.
    • An example of an AIIB project is a rural road connectivity initiative that will benefit approximately 1.5 million rural residents in Madhya Pradesh, India. 
      • In April 2018, the AIIB announced the project, which is also expected to improve the livelihoods, education, and mobility of the residents of 5,640 villages. The project is a U.S. $140-million jointly financed by the AIIB and the World Bank.
• Recent projects
  • AIIB has approved a USD356.67 million loan to the Government of India to support the expansion of the Chennai metro rail system. 
    • The project involves the construction of a new corridor in Chennai’s metro network as part of Chennai Metro Rail Phase 2.

• It has recently emphasised green projects and supporting public health initiatives during the COVID-19 pandemic, besides infrastructure. 
  • In October 2021, India applied for loans from the AIIB and ADB to procure 667 million doses of COVID-19 vaccines with the ADB expected to lend $1.5 billion and the AIIB around $500 million, under the ADB’s Asia Pacific Vaccine Access Facility (APVAX) initiative.

Source: TH