Prepare projects for funding, AIIB chairman tells NepalThe chief of the China-led Asian Infrastructure Investment Bank has said the bank is ready to finance infrastructure projects in Nepal.
The chief of the China-led Asian Infrastructure Investment Bank has said the bank is ready to finance infrastructure projects in Nepal.
“There are a lot of things that can be done in Nepal,” Liqun Jin, chairman and president of the AIIB told the Post. “Get the projects ready. We are willing to do it. If a country is ready, we can do multiple projects at a time.”
Liqun, however, did not comment on the status of almost half a dozen project proposals submitted by Nepal earlier. In the last week of June, a team led by former finance secretary Lok Darshan Regmi had submitted proposals for five infrastructure projects—two energy projects, two road projects and an urban infrastructure project.
According to Liqun, it is difficult for the AIIB to talk about allocation of resources for Nepal. “We have just started. It is hard for us to say how much you can get in the next five-ten years,” he said. The concessional loans provided by the bank can be repaid in 30-35 years.
The AIIB has set three principle criteria—financial sustainability, environment friendliness and social acceptance—for financing projects. The bank has stated that it will look at the consequences of infrastructure in line with the environmental hazards it can cause and acceptability of the project by the people who have been adversely impacted. “We cannot fund a project which will have direct [negative] impact on the people,” Liqun said.
A report published by the World Bank titled “Reducing Poverty by Closing South Asia’s Infrastructure Gap” in 2014 showed Nepal needs to invest 8.24 to 11.75 percent of its gross domestic product to bridge the gap in infrastructure sector. The report stated that Nepal’s investment in infrastructure amounts to five percent of the GDP. The funding shortfall is $13-$18 billions for 2011-20.
The AIIB has 57 members. Twenty-six countries that applied for membership are awaiting approval. Nepal, one of the founding members of the bank, sits on its board.
Asked if the bank has plans to open a resident mission, the AIIB head ruled out such a possibility. Liqun said the bank has a different business model and that it plans to centralise decision-making in its headquarters, with multiple departments working on national projects, in Beijing.
“This will help us reduce costs,” Liqun said, adding that the bank will set up a liaison office once the project gets functional. These offices would have some local coordinators.