The Asian Infrastructure Investment Bank

The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank (MDB) focusing on the development of infrastructure and other productive sectors in Asia, including energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics, etc.

AIIB will complement and cooperate with the existing MDBs to jointly address the daunting infrastructure needs in Asia and welcomes all regional and non-regional countries, developing and developed countries, that seek to contribute to Asian infrastructure development and regional connectivity.

(The operational strategy and priority areas of engagement may be revised or further refined by its governing boards in the future as circumstances may warrant.)

History of AIIB

Chinese President Xi Jinping and Premier Li Keqiang announced the AIIB initiative during their respective visits to Southeast Asian countries in October 2013.

One year later, representatives from 22 countries signed the October 2014 Memorandum of Understanding (MOU) to establish the AIIB and Beijing was selected to host Bank headquarters. Mr. Jin Liqun was appointed as the Secretary General of the Multilateral Interim Secretariat.

The Prospective Founding Members (PFMs) established the Chief Negotiators Meeting (CNM) as the forum for PFMs to negotiate and agree on AIIB's Articles of Agreement (the Articles) and other issues related to the Bank's establishment.

By the deadline of March 31st for submission of membership applications, the Prospective Founding Members had increased to 57. The final text of the Articles was adopted by the 5th CNM on May 22, 2015 in Singapore. The Articles were signed by all 57 PFMs between June 29, 2015 and December 31, 2015.

The Articles entered into force on December 25, 2015, when instruments of ratification had been deposited by 17 Signatories with initial capital subscriptions totaling 50.1 percent of the shares allocated. Remaining Signatories that have not yet deposited their instruments of ratification are expected to do so by December 31, 2016.

The following table shows the Signing and Ratification Status of the AOA of the AIIB:

AIIB 2016 Business Plan and Budget

The 2016 AIIB Business Plan (BP) and Budget were approved by the Bank’s Board of Directors on January 17, 2016. The BP sets out the strategic and institutional priorities for 2016, supported by the approved administrative budget of $ 52.4 million, plus a capital budget of $ 7.5 million.1

The BP and Budget embody the shared goals and priorities identified in extensive discussions over the course of 2015 with the Bank’s 57 Prospective Founding Members. The institutional and operational strategic goals reflect that 2016 will be a year of institution building and capacity development.

The Bank’s key institutional challenges are to: finalize the policy foundation and administrative framework; bring on board a top caliber managerial team and experienced professional staff to ensure effective implementation; and develop and nurture a strong ethics-based corporate culture. Operationally, Management aims to start a rolling pipeline and to deliver high quality, timely financing to clients.

Given the start-up nature of the first year of operations, there will be a mid-term review (MTR) with the Board of Directors. At the MTR, Directors will also discuss the approach, approval processes, and timeline for the 2017 Business Plan and Budget.

Sovereign-Backed Loan and Guarantee Pricing

1. Sovereign-Backed Loan Pricing

The Bank will initially charge a fixed spread to LIBOR (Lending Spread).

A. The fees and spread applicable to sovereign-backed loans are set out in Table 1:

B. The Lending Spread consists of four components: the contractual lending spread, the maturity premium, the risk premium and the projected funding spread to LIBOR. The individual components of the Lending Spread as well as the overall Lending Spread applicable to different maturity categories are set out in Table 2:

2. Sovereign-Backed Guarantee Pricing

The fees and charge for sovereign-backed guarantees are set out in Table 3:

The Guarantee Fee includes an annual maturity premium as set out in Table 4:

The following is a chart on referral links for AIIB-related documents: