BAKU, Azerbaijan, June 21. The Asian Infrastructure and Investment Bank (AIIB) works to contribute to the development of green finance in global financial markets, Ludger Schuknecht, Vice President, Corporate Secretary at the AIIB, told Trend.
"On the financial side, AIIB upholds high standards in environment, social, and governance criteria and requires Paris alignment. All the bonds we issue and the financing we provide are green and sustainable. Through our financing activities and fundraising efforts, we contribute to the development of green finance in global financial markets," he said.
According to Schuknecht, the bank, through its projects, engages in financial intermediation.
"This involves financing projects directly, as well as financing banks and other financial intermediaries. We provide equity, loans, and finance bonds to enable these institutions to finance high-quality, climate-friendly infrastructure. For example, one of our projects involves investing in adaptation by providing equity to companies striving to enhance climate change adaptation. We also manage a bond fund focused on purchasing bonds exclusively from firms that meet AIIB's rigorous ESG standards," the VP explained.
Furthermore, AIIB supports companies in improving their standards and developing markets for green products, Schuknecht added. "For instance, we participate in securitization and equity investments. These financial instruments play a crucial role in promoting the transition to greener economies".
"We serve all our members. We have clients in middle-income countries and even some in higher-income countries. However, we are also committed to ensuring that low-income countries have access to funding from our bank. We need to balance this with the overall risk of our portfolio, so we can only allocate a limited amount of financing to such countries. Therefore, we prioritize working with better-rated countries for our projects," he pointed out.
Furthermore, to support lower-income countries, the AIIB provides financial assistance such as project preparation financing and concessional financing. "This support may come directly from us or from other member countries that contribute to these projects. While the assistance available for the poorest countries is limited, it does exist".
