What is the AIIB?
The Asian Infrastructure Investment Bank (AIIB) is a multilateral bank focused on infrastructure investment in Asia across a range of sectors, including transport, energy, water and communications. It is not a development bank in the style of the World Bank Group or the Asian Development Bank although it has been designed to complement the work of both organisations.
There is a large infrastructure financing gap in the Asian region – over the next decade, it is estimated that USD26 trillion of financing will be required to meet the needs of Asia by 2030. The AIIB, along with the work already being undertaken by the World Bank Group and Asian Development Bank, is helping to fill this gap and leverage private sector funds for infrastructure projects.
The AIIB became operational on the 25 December 2015 and has a total authorised capital of USD$100 billion. The Board of Directors of the AIIB has approved the financing of a number of projects in Asia, encompassing energy, transport, urban development and other infrastructure sectors.
See Asian Infrastructure Investment Bank website.
What is Australia’s involvement with the AIIB?
Australia was a founding member of the AIIB, and ratified the Articles of Agreement ahead of the Bank’s establishment on 25 December 2015. Australia’s Governor for the AIIB is the Treasurer.
Australia is contributing USD738 million paid-in capital to the AIIB over five years and is the sixth largest shareholder. This investment will not come at the cost of other Government spending and will not directly impact on the Budget bottom line.
Australia leads a constituency consisting of Australia, New Zealand, Singapore and Vietnam on the 12-member Board of Directors.
How will the AIIB affect Australia?
The AIIB will improve trade and investment opportunities across our region. It will also provide opportunities for Australian businesses to bid for contracts under the AIIB’s open procurement model.