Lyon: PonteSud – News Desk
The tenth annual meeting of the board of directors of the Asian Infrastructure Investment Bank (AIIB) has been making headlines this week.
The reason is that the Chinese-led bank has been heavily involved in projects across the region. Experts in Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan are watching the new deals signed with their governments to try to forecast the future of economic developments.
There have been several meetings recently with the representatives of the Bank that also sparked interest. Notably, on 29 April, the AIIB organised a panel discussion with Kazakhstan’s Ministry of National Economy at the Astana International Financial Centre (AIFC).
Representatives from development banks, investment firms, and government agencies agreed that mobilising private capital is essential to closing an Asian infrastructure financing gap worth trillions of dollars.
The session opened with remarks by Konstantin Limitovskiy, a chief investment officer at AIIB, who joined virtually to reaffirm Kazakhstan’s strategic importance to the bank’s portfolio.
He noted that Kazakhstan, a founding member of the AIIB, has received more than $2 billion in investments across seven major public and private sector projects.
“These are roads that bring communities closer, renewable energy that lights up homes, and hospitals that provide critical care. Kazakhstan’s strategic position as a major dispersion and trade hub aligns with our mission to foster international connectivity,” said Limitovskiy at the time.
He emphasised the AIIB’s role in projects aligned with Kazakhstan’s goal of achieving carbon neutrality by 2060.
“We are supporting Kazakhstan by adding 420 megawatts of green energy so far,” he said, highlighting ongoing wind farm developments and the landmark financing of the country’s first hospital under its public-private partnership (PPP) law.
The Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB) and the energy ministries of Uzbekistan, Kazakhstan and Azerbaijan also signed a memorandum of understanding on 5 April to support the feasibility study for the Caspian Green Energy Corridor project.
“The Caspian Green Energy Corridor initiative is a strategic priority for the three countries, as well as for ADB, as it directly contributes to our core mission of facilitating cross-border cooperation on clean energy infrastructure while addressing multiple regional challenges,” said ADB Director General for Central and West Asia Evgeny Zhukov.
Across the world, and predominantly in Asia, the bank has committed or approved over $100bn. About half of the development projects relate to energy, transport, and rural transformation.
In the list of the Bank’s projects, one can see that the five countries of Central Asia have attracted about $7.5bn worth of loans.
Indeed, according to the global financial institutions, the average growth of the region over the past 20 years was 6.1%, with its economy projected to be rising at about the same rate this year as well. The EBRD projects a steady growth rate over the next several years.
The region also experiences an average annual population growth of 1.1%, adding further strain to its infrastructure – much of which, particularly at the regional level, was built in the 1950s and 1960s during the Soviet era.
The highest number of projects funded by the bank was in Uzbekistan and the nature of the projects signals growth and rural development effort by the government.
After initial loans in 2020 aimed at mitigating economic effects of Covid 19 pandemic, also extended to Kazakhstan, most of the projects in Uzbekistan found on the AIIB’s list concern energy and rural development.
These projects include large-scale initiatives exceeding $500 million, aimed at strengthening overall economic resilience, improving infrastructure, and supporting the transition to a green economy.
There are also more targeted efforts, such as the (re)construction of water supply systems for towns in the Bukhara region, with two projects worth $248 million and $165mn, respectively.
Other examples include the $108mn electrification of the railway between the rapidly growing tourist cities of Bukhara and Khiva, as well as a $100mn urban development project focused on small cities.
There are also a number of energy projects, all renewable, hydro power, solar and wind. All but one were non-sovereign projects (not government, but private or public enterprise debt) funding the construction of wind farms and solar parks.
