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The headquarters of the Asian Infrastructure Investment Bank in Beijing, capital of China, Jan. 13, 2021. / Xinhua

The headquarters of the Asian Infrastructure Investment Bank in Beijing, capital of China, Jan. 13, 2021. / Xinhua

Editor’s Note: Matteo Giovannini is a finance professional at the Industrial and Commercial Bank of China in Beijing and a member of the China Task Force at the Italian Ministry of Economic Development. The article reflects the views of the author and not necessarily those of CGTN.

The past four decades of China’s reform and opening-up policies have been widely hailed for the remarkable economic and social achievements the country has been able to achieve both at the national level, with tangible improvement in the living conditions of the people. , and internationally. , with concrete benefits for the global economy as a result of the country’s membership of the World Trade Organization (WTO) 20 years ago.

A higher level of integration with the rest of the world has naturally brought increased responsibilities and expectations for a country whose share of economic production in the global economy has increased from 4% in 2001 to almost 17% in 2020. .

A changing economic environment towards a multipolar world order, a growing lack of confidence in the financial practices of the West, the need to catalyze more investment to Asia and a clear under-representation of emerging nations in ruled institutions by the post-war United States can all be seen as aspects that led the Chinese government to initiate a new protagonist in the financial landscape of multilateral development organizations.

On December 25, the Asian Infrastructure Investment Bank (AIIB), an international financial institution established in the Chinese capital to complement long-standing lenders such as the World Bank, the International Monetary Fund (IMF) and the Asian Bank development (ADB), celebrates the 6 anniversary since the start of its operations when 57 founding members agreed to join and the bank’s statutes entered into force.

One of the most relevant aspects that probably sets the AIIB apart from similar multilateral organizations is that the bank has been able (thanks to a high level of corporate agility and a lean governance structure) to adapt quickly. to a changing business environment, thereby expanding its reach. beyond Asia and by expanding its scope of activity.

A key document that provides valuable information for understanding the current choices of the AIIB is the Corporate Strategy, which was approved last year and outlines the vision, mission and strategic directions of the bank for growth to. ‘in 2030.

An internal view of the headquarters of the Asian Infrastructure Investment Bank (AIIB) in Beijing, capital of China, Oct. 24, 2019. / Xinhua

An internal view of the headquarters of the Asian Infrastructure Investment Bank (AIIB) in Beijing, capital of China, Oct. 24, 2019. / Xinhua

Climate change is one of the most pressing global challenges of our century. In order to reduce global emissions, AIIB’s goal is to have renewable energy and green infrastructure projects in its portfolio that meet or exceed half of actual funding approvals by 2025.

What might be considered a bold statement is actually a very manageable goal, given that funding for climate-related projects already reached 41% of the bank’s infrastructure portfolio last year. The additional push for prioritization of projects dedicated to climate action and which can bring measurable improvements to the environment and local communities. So suggesting that the 50 percent target (four years from now) is just a formality.

From a broader perspective, the AIIB’s strategic decision aims to align its operations with the Paris Agreement. In this context and given the climate objectives set by July 1, 2023, the bank has publicly stated that it expects a 300% increase in annual financial commitments to reach $ 50 billion in climate finance by 2030.

To achieve these ambitious goals, technological innovation and private sector financing will become two essential factors in creating a smooth transition to a new paradigm of infrastructure investment focused on sustainability.

Technology will play an essential role in improving traditional infrastructures while streamlining processes, promoting sustainability, increasing the level of quality and safety and reducing costs and financial risks. The central role played by innovation during the COVID-19 pandemic is a prime example of how technology can facilitate the continued functioning of economies while fostering an irreversible transition to digital solutions in sectors ranging from healthcare to education.

The growing level of public debt resulting from the pandemic is making it increasingly difficult for the public sector to meet growing infrastructure needs, particularly in Asia, a region which accounts for 60% of the world’s population and over 45% of the world’s population. the global economy. In this regard and in light of the ambitious goals of green finance, the key role of AIIB is to leverage its strong brand, good reputation and track record to become a resource catalyst for institutional investors, in making private capital play a more relevant role in financing. the infrastructures of tomorrow.

Ultimately, it is only through a combination of in-house banking expertise in structuring transactions, implementing third-party technological advancements, and deploying private capital inflows that the AIIB will be able to to successfully lead the transition into the future. climate-resilient infrastructure that produces long-term development for local communities while preserving the planet’s natural resources.

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