EBRD eyes co-financing infra projects with China-led AIIB
27 Jun 2015
European Bank for Reconstruction and Development (EBRD) president Sir Suma Chakrabarti has called for strong cooperation between his institution and other multilateral development banks and the newly created Asian Infrastructure Investment Bank (AIIB).
The EBRD was established to help build a new, post-Cold War era in Central and Eastern Europe. It has since gained unique expertise in fostering change in the region - and beyond.
Speaking in Beijing, Sir Suma suggested that the EBRD and AIIB could launch their new partnership by making 'common cause in the area of climate change' and 'collaborating on investment in sustainable infrastructure'.
The head of the EBRD said his institution hoped to have its first joint projects with the new $100-billion China-led Asian Infrastructure Investment Bank (AIIB) in place by next year.
Addressing the fourth Global Think Tank Summit of the China Center for International Economic Exchanges (CCIEE), Suma revealed that the EBRD was already in 'intense and wide-ranging' dialogue with the AIIB.
''We like what we have heard so far,'' he said.
''We have many common shareholders - and many countries where both of us will be operationally active.
''The potential for synergy - and for making a real, lasting difference on the ground – is huge. And we are doing everything we can to realise that potential even now.''
The birth of the AIIB was one of several reasons 2015 was proving a crucial year for multilateral development banks, he said.
The others were new emphasis on infrastructure as a driver of economic growth - and the adoption of new Sustainable Development Goals in the autumn and the COP21 meeting in Paris.
''Our shared ambition should be for the EBRD and AIIB, joined by the other multilateral banks, to work together, co-financing where we can, to close the 'infrastructure gap','' he said.
The annual gap between investment needs and investment flows is as high as $1 trillion every year, he added.
"We in the EBRD will be ready to present AIIB with several projects next year ripe for immediate co-financing.''
However, he said, it is not just the amount of investment in infrastructure or where that investment comes from that matters. What counts is the infrastructure's quality as well.
''By quality of infrastructure, I mean the energy and emission intensity, the resource efficiency of the investments EBRD and AIIB countries will make over the next decade.''
''Together, they will determine the level of the world's emissions for a period much longer than the next ten years. And hence our ability to mitigate the climate challenge for generations to come.''
In that context, Suma welcomed the AIIB's commitment to being 'lean, clean and green'.
During his trip to Beijing Sir Suma is also holding discussions with senior Chinese officials, including from the People's Bank of China, the Chinese central bank.
China is not a member of the EBRD, which does not invest in the country. However, the EBRD would consider working with Chinese partners on joint investments in those countries which are recipients of EBRD finance.
The EBRD was founded in 1991 after the fall of the Berlin Wall to foster the development of market economies in former communist, centrally-planned countries. It now invests in 36 countries stretching from central Europe to central Asia and the southern and eastern Mediterranean.