The Asian Infrastructure Investment Bank, which is Beijing’s answer to the World Bank, has said that it will unveil a “climate action plan” that will increase its climate change lending by 2030.
The AIIB’s strategy to boost lending for projects that address climate change is multi-faceted. One aspect is co-financing projects with other multilateral lenders, building on its $4.4bn in funding for 20 such projects with the World Bank between 2021 and the end of August this year.
“The global fight against climate change will be won or lost in Asia,” said Danny Alexander, vice-president for policy and strategy at the AIIB. “The majority of emissions come from Asian countries.”
According to reports, the focus on climate lending reflects the AIIB’s desire to establish itself as part of the international financial architecture, after US hostility to its creation in 2016. It builds on the bank’s 2020 pledge to stop financing coal-fired power stations and other coal-related projects.
Alexander said that the plan, which will be announced at the bank’s annual meeting in Egypt this week, foresees a tripling by 2030 in annual lending for projects to fight climate change. This would make climate finance the bank’s top lending priority, accounting for more than half of the funds it disbursed.
“Last year, our climate financing was $2.6bn and by 2030, it will be around $7bn to $8bn annually,” said Alexander. “Over the course of this decade, it will be more than $50bn in climate financing that the AIIB is putting out there.”
The AIIB, which is a China-led multilateral development bank with 106 member countries including the UK, France and Germany, was rocked earlier this year by accusations from its Canadian former head of communications, Bob Pickard, that it had a “toxic culture”.
Pickard, who abruptly left the bank in June, alleged that the Chinese Communist party ran the bank from the shadows “like an internal secret police”. The Canadian government subsequently said it was suspending ties with the AIIB while it investigated Pickard’s complaints.
Pieter Bakker, who is senior communications officer, was quoted as saying that the AIIB was “fully co-operating” with Canada’s review into the “baseless allegations” made by Pickard. He added that an internal AIIB review had found there was “no evidence of undue influence on decisions taken by the board of directors or management”.
Story was adapted from Financial Times.