China's AIIB eyes $10-12 billion a year in project financing, steady growth

FILE PHOTO: The headquarters of Asian Infrastructure Investment Bank (AIIB) is seen under construction in Beijing, China May 5, 2019. Picture taken May 5, 2019. REUTERS/Stringer

DALIAN, China (Reuters) - The Asian Infrastructure Investment Bank (AIIB) aims to finance infrastructure projects worth $10-12 billion annually over the coming years, and will maintain a prudent approach in investing in such deals, the bank’s vice president of policy and strategy said.

The AIIB has 97 members and was launched in January 2016 to help meet Asia’s infrastructure needs. Since starting its operations, it has financed some $8 billion in projects, mostly in Asia.

“We are gradually growing our investment, and that’s very little compared to the infrastructure finance needs,” Joachim von Amsberg told reporters on the sidelines of the World Economic Forum in the northeastern port city of Dalian.

“It’s more important that we start with very high quality projects that really meet environmental and social standards and avoid corruption, rather than building up our investment as quickly as possible. So quality comes before quantity.”

The AIIB aims to finance projects worth about $4 billion this year, about 20 percent more than the $3.3 billion it financed in 2018, the bank has said.

Von Amsberg said that the AIIB has been trying to avoid exacerbating debt risks in countries where it invests but still sees great potentials in Asia.

“We are very careful about investing in countries that face possible risks of debt distress. We are well aware how hurtful that distress can be for countries,” he said.

China’s Belt and Road program has stoked foreign criticism that its opaque financing could lead to unsustainable debt and that it aims more to promote Chinese influence than development.

The China-U.S. trade war is having little impact on the AIIB, which still welcomes the United States to join the bank as one of its new members, von Amsberg added.

Reporting by Kevin Yao; Editing by Kim Coghill