China-backed AIIB touts growth and sustainability
JEJU, SOUTH KOREA Leaders of the China-backed Asian Infrastructure Investment Bank (AIIB) touted its growing membership and commitment to sustainable development at its annual meeting, even as environmental groups were disappointed by its openness to investing in coal projects.
The AIIB, which has 80 member countries, was set up to help meet the estimated US$26 trillion (S$36 trillion) need for infrastructure spending in Asia through 2030, while also demonstrating that a China-led institution can meet international standards for best practice.
The United States and Japan, both members of the Manila-based Asian Development Bank (ADB), have not joined the AIIB.
The AIIB has pledged to use its investments to help members fulfil their commitments to the Paris climate accord, which the US is withdrawing from under President Donald Trump.
"We will not consider proposals if we are concerned about the environmental and reputational impact," AIIB president Jin Liqun, a former vice-president at the ADB, said on Friday at the opening ceremony.
But the bank did get pushback from environmental groups about its commitment to being green, with several non-governmental organisations (NGOs) saying they were disappointed that the bank's new energy industry strategy left the door open for coal sector investments.
"I have a hard time reconciling in the energy strategy a statement that says up front the purpose of the energy strategy is to help countries meet their commitments under the Paris agreement with, 'We're going to finance coal projects,'" said Mr Andrew Deutz of The Nature Conservancy.
Mr Jin said that after many rounds of discussion on the bank's energy policy, "this is the best we can achieve", adding that there are no new coal projects in its pipeline of investments.
Other groups saw improvement over the last year in how the bank engages with NGOs.
"We thought this was a really interesting opportunity to see if this new institution can foster a race to the top in terms of creating strong, sustainable credit practices, or foster a race to the bottom," said Ms Katherine Lu of Friends of the Earth.
The bank began operations 18 months ago and has approved US$2.5 billion in loans.
It expects that number to reach about US$4 billion by the end of this year.
By comparison, the ADB made US$17.74 billion in commitments last year.