Business / Economy

AIIB rules out irrational financing moves

By Li Xiang and Zhang Min (China Daily) Updated: 2016-06-29 07:13

AIIB rules out irrational financing moves

Jin Liqun (center), president of the Asian Infrastructure Investment Bank, talks during a panel discussion at the World Economic Forum's annual event in Tianjin, June 28, 2016. [Zhu Xingxin/China Daily]

Bank chief Jin Liqun says the lender will have 90 members by the end of the year

The Asian Infrastructure Investment Bank will finance projects as per prudential norms, avoiding irrational moves, Jin Liqun, the lender's president, said on Tuesday.

"The AIIB is a well-conceived and well-sorted-out initiative," Jin said, noting that the bank will not react to anything irrationally.

The AIIB chief was commenting on the British vote to leave the European Union during a panel discussion at the World Economic Forum's annual China event in Tianjin, better known as the Summer Davos.

Jin said the British decision is "very emotional" and the country should not "leap into somewhere unknown".

He earlier told Bloomberg in an interview that China has ample fiscal space to cope with any market turbulence triggered by the Brexit vote.

At Tuesday's forum, Jin reiterated the AIIB's goal, which is to promote shared interests of its founders by improving regional and global connectivity and the livelihood of people.

The bank has about 30 countries and regions waiting to join as members and it will see its membership grow to nearly 90 by the end of this year, he said.

The AIIB announced four financing projects worth $509 million for electricity, transportation and urban development in Bangladesh, Indonesia, Pakistan and Tajikistan, last week in Beijing.

Jin said projects must meet three basic requirements-financial sustainability, social acceptability and being environmentally friendly-in order to qualify for AIIB funding.

"Any projects good for Asia, whether they are in or outside of Asia, could be considered by the AIIB," Jin said, noting that the ultimate goal of the AIIB is to promote peace and prosperity.

Jin said the AIIB will also support countries that are not involved in the Belt and Road Initiative as the bank aims to promote broad-based interests.

"If a project is not embraced by the people and the countries, you cannot do it," Jin said. "We should have shared visions for shared benefits."

Benedikt Sobotka, chief executive officer of Luxembourg-based Eurasian Resources Group, said that the China-led Belt and Road Initiative is not just a concept but a reality that is being implemented by the Chinese government and companies to improve infrastructure connectivity in Asia, Africa and Europe.

The natural resources company is benefiting from the initiative as it is already participating in multibillion-dollar projects in the region and joint projects between China and Kazakhstan in areas such as power plants, railways and ports, he said.

"It is very difficult to find projects and secure funding in the region. We are getting support from the Chinese banks, State-owned enterprises and engineering firms," he said.

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