Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank that aims to improve social and economic outcomes in Asia. Its mission includes connecting people, services, and markets with the potential of impacting billions of lives over time through sustainable infrastructure investments and other productive sectors. AIIB was established according to the AIIB Articles of Agreement, a multilateral treaty that came into effect in December 2015.
Institutional Framework of AIIB
Headquartered in Beijing, China, AIIB commenced operations in January 2016. The organizational structure of AIIB comprises of various bodies, including the Board of Governors, Board of Directors, Senior Management, and an International Advisory Panel. The Board of Governors, consisting of one Governor and one Alternate Governor appointed by each member country, are responsible for directing the bank’s general operations. AIIB’s President, elected by its shareholders for a five-year term, heads the staff. The International Advisory Panel supports the President and Senior Management on the bank’s strategies, policies, and general operational issues.
Key Accomplishments of AIIB
Since its inception in 2016, AIIB has shown remarkable growth in its worldwide membership. It started operations with 57 founding Members. By the end of 2020, this expanded to 103 approved Members, representing approximately 79% of the global population and 65% of global GDP. Its sound financial standing has been recognized by top credit rating agencies— Standard & Poor’s, Moody’s and Fitch, assigning it AAA ratings since 2017. This achievement has facilitated AIIB’s expansion in international capital markets.
AIIB’s Role in International Development
In 2018, AIIB was granted Permanent Observer status in the deliberations of both the United Nations General Assembly and the Economic and Social Council, marking its importance in international development. AIIB has significantly contributed to the development of infrastructure sectors by adopting innovative policies and strategies that have been approved and implemented successfully.
AIIB’s Relationship with India
India enjoys a vital relationship with AIIB, as it is the recipient of more loans from the bank than any other member nation. Moreover, India is the second-largest shareholder after China in the AIIB. The bank has funded 28 projects in India, totaling USD6.7 billion, focusing on green initiatives, public health support during the Covid-19 pandemic, and infrastructure development. In October 2021, India sought loans from AIIB and the Asian Development Bank (ADB) to procure 667 million doses of Covid-19 vaccines. Finally, AIIB approved a USD356.67 million loan to the Indian government in 2021 for the expansion of the Chennai metro rail system.
