The US-led World Bank and the Chinese-led Asian Infrastructure Investment Bank (AIIB) this week signed a deal to co-finance around $1.2bn worth of infrastructure work this year.
As the world’s multilateral development banks collaborate ever more closely, leveraging each other’s financing and expertise, the people who will benefit the most will be the world’s poor– Jim Yong Kim, World Bank Group President
It is the first agreement of its kind and signals the growing acceptance of China’s AIIB by the US-dominated global network of development finance institutions.
In 2016, the AIIB expects to approve a modest $1.2bn in project financing, with World Bank joint projects anticipated to account for "a sizeable share", the World Bank said in a statement, without giving details.
"The AIIB is very grateful for the generous and timely support offered by the World Bank Group throughout our establishment process, and we look forward to a long and fruitful relationship with ongoing cooperation in project co-financing and other areas," said AIIB President Jin Liqun (pictured).
The agreement outlines the co-financing parameters of World Bank-AIIB investment projects, and paves the way for the two institutions to jointly develop projects this year, the World Bank said.
World Bank Group President Jim Yong Kim called it "an important first step toward working with a new partner to address the world’s huge infrastructure needs."
He added: "As the world’s multilateral development banks collaborate ever more closely, leveraging each other’s financing and expertise, the people who will benefit the most will be the world’s poor."
Some 1.2 billion people in the world lack access to electricity and 2.4 billion people don’t have access to basic sanitation services, the World Bank said, adding that the two banks are discussing "nearly one dozen" co-financed projects in sectors that include transport, water and energy in Central Asia, South Asia and East Asia.
Also this week, the AIIB appointed a senior official from the Asian Development Bank (ADB) as head of its fledgling integrity and compliance unit. The official, Hamid Sharif, is currently the ADB’s China country director.
Photograph: AIIB President Jin Liqun (Wikimedia Commons)