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AIIB ready to provide funds for infrastructure projects
The Asian infrastructure investment bank (AIIB) is ready to help Indonesia develop its infrastructure in President Joko “Jokowi” Widodo’s second term in office
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span>The Asian infrastructure investment bank (AIIB) is ready to help Indonesia develop its infrastructure in President Joko “Jokowi” Widodo’s second term in office.
President Jokowi previously said he would focus on human capital development in his second term, but infrastructure developments would remain a priority as well.
AIIB chief investment officer DJ Pandian said the agency was prepared to help finance infrastructure development in Southeast Asia’s largest economy.
“[The infrastructure projects] can be irrigation, ports, roads etc.,” Pandian told The Jakarta Post in a recent video call ahead of the 2019 AIIB Annual Meeting, which is to be held in Luxembourg from Friday to Saturday.
AIIB data show that the multilateral development bank’s investment in Indonesia as of April 2019 stood at US$940 million, most of which went into urban development and water and waste projects across the archipelago.
The development projects approved by the AIIB include the Mandalika urban and infrastructure project for 2019 to 2023, for which the bank will provide $248.4 million.
In a statement made after securing the loans in December, the Indonesia Tourism Development Corporation (ITDC) said the funds would be used to construct infrastructure and basic facilities at the Mandalika Special Economic Zone, including clean water, sanitation, drainage, waste treatment, electricity distribution, disaster mitigation and open public spaces.
The development of infrastructure in Mandalika is expected to bring in foreign investment, with a target to develop tourist facilities that include 10,000 rooms at star-rated hotels, convention centers, a 27-hole golf course, commercial facilities, hospitals and a street race circuit for the MotoGP.
The ITDC added that the project also included facilities in the surrounding areas to ensure that the local people also benefit from the project.
With $940 million in investment commitments, Indonesia is the second largest recipient of AIIB funds after India with $2.22 billion, which is also used to develop the sectors of energy and finance.
Pandian added that, in a broader sense, the multilateral agency had a mandate to improve connectivity among countries in Asia by developing ports, as well as roads and railways for landlocked countries.
The annual meeting would highlight Asia-Europe cooperation and digital connectivity, aside from other issues,
such as infrastructure in a decarbonized world, finance for the circular economy, environmental improvement and governance in cybersecurity, among other issues.
Meanwhile, through its official statement, the AIIB said the annual meeting would also showcase Luxembourg’s expertise in the field of digital connectivity and blended finance.
“We wanted to host an annual meeting in Europe during our first few years of operations to acknowledge the support of our European members and demonstrate how multilateral institutions are well-positioned to enhance connectivity between Europe and Asia,” said AIIB vice president and corporate secretary Danny Alexander in a statement available on the AIIB website.
“We look forward to learning from and partnering with Europe’s leading organizations to fight climate change and develop sustainable infrastructure in Asia and beyond.”
The Asian Infrastructure Forum (AIF), a business development forum on creating connections and developing project pipelines, will be part of the 2019 AIIB Annual Meeting.
This year’s forum will include interactive workshops on private equity investment, financing of energy projects and AIIB procurement policies and practices.
Delegations from relevant countries will present investment opportunities in Bangladesh, the Philippines and Uzbekistan.
“By hosting AIIB’s first annual meeting to be held outside Asia, Luxembourg will further demonstrate its role as a bridge in the heart of Europe bringing European and Asian stakeholders together, thus helping to develop innovative and sustainable solutions in infrastructure financing,” Luxembourg Finance Minister Pierre Gramegna said in a statement.
Luxembourg, a founding member of the European Union and a major international financial center, was the first European country to sign up as an AIIB founding member in 2015.
The theme of the 2019 AIIB Annual Meeting is “Cooperation and Connectivity” in recognition of the economic and social benefits that can be realized through better connectivity among countries and regions, including Europe and Asia.
