Asian investment bank: ‘We could invest in the EU’

Joachim von Amsberg is a German economist and banker. Prior to his appointment as AIIB vice-president,he was vice-president of the World Bank. [AIIB]

The Asian Infrastructure Investment Bank (AIIB) has recently decided to start looking abroad to invest its $100 billion in capital, including ports in the EU. His vice-president Joachim von Amsberg told EURACTIV there wouldn’t be any rivalry with EU institutions, but rather “collaboration”.

Joachim von Amsberg is a German economist and banker. He is vice-president for policy and strategy at the AIIB. Prior to his appointment, he was vice-president of the World Bank.

Joachim Von Amsberg spoke with EURACTIV’s Jorge Valero

AIIB is strongly linked to One Belt One Road (OBOR), which China’s geopolitical initiative in the region. Is there a geopolitical interest also behind the bank?

AIIB and OBOR are mention together. They shared a common objective which is connecting countries, promoting well-being and social development. But they are also very different. OBOR is a Chinese initiative, while AIIB is a proper institution whose members have an interest beyond OBOR. We will finance many projects that fall outside of it.

The bank has already allocated around $4.4 billion for projects. How much was invested in OBOR projects?

We have invested that amount in 36 projects. The specific answer is difficult because there is no clear definition of what is OBOR, so I cannot tell clearly you which projects were OBOR projects.

We financed a couple of roads in Pakistan and Tajikistan which clearly were part of the road corridors of OBOR. But we have financed other projects in Pakistan that I don’t think they fall under the OBOR per se and still they are in the economic area that OBOR wants to develop. So it is very hard to respond.

Narrowly speaking, there would be two or three projects, especially corridor related, with a very small amount invested, probably hundreds million dollars.

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Do you foresee that the bank could invest in some European projects as well?

We focus on infrastructure connectivity and sustainable projects. We have been focusing and we will focus on Asia because it is our primary objective.

But we have recently agreed with our board that we could also invest in some of our non-regional countries if those projects provide benefits for the economic development of Asia.

This could happen in two ways. One is through trade, so we could, for example, invest in ports that support trade with non-Asian countries. Or we could invest in particular in clean energy in non-regional countries because CO2 emissions are global, which means that it would affect Asia the most because it is the largest continent.

That would include also EU countries?

We can invest in all our members, regardless of the income level. Compared to other development banks we are different because we don’t have an income threshold above which we don’t invest.

We can invest in EU member countries as long as they are members of AIIB. In practice, our financing model is attractive for middle-income countries because of the borrowing costs. Therefore, we don’t expect to invest a lot in high-income countries.

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If you invest in Europe, you may clash with the EU’s investment plan. Do you think that some rivalry with EU institutions could emerge?

That is a very remote concern, if at all. We have so much to do in Asia that we are not rushing to invest out of Asia. Our priority remains Asia. And it would not often be the case that we have to finance countries with good access to capital markets themselves.

I can see us working in particular in Eastern Europe and Central Asia, where many of this trade connectivity between Asia and Europe will focus. Here I could see complementarity between the AIIB and the European institutions. But the financial needs are large, so I would call it collaboration rather than competition.

How is it the relationship with Donald Trump administration, given the US’s criticism toward the AIIB when the bank was set up?

Two G7 countries (the US and Japan) chose not to join the AIIB. We continue to be open to all eligible countries. We would welcome new members, including these two countries.

We also signal openness in other ways. For example, we have staff from non-member countries, including from those two countries. In addition companies from non-AIIB can compete for contracts, including these countries.

US frets as major EU powers join new China-led 'World Bank'

The United States has urged countries to think twice before signing up to a new China-led Asian development bank that Washington sees as a rival to the World Bank, after Germany, France and Italy followed Britain in saying they would join.

But given the weight of the US in multilateral institutions, have you noticed a deterioration in the relationship with the World Bank?

We haven’t heard any critical comment in recent times from those two countries. The original scepticism has given way to much positive comment in the media and in the general discussion.

The relationship with the World Bank and the Asian Development Bank (ADB) also has improved more than deteriorated over the past years. We are here to complement, we are not here to negatively disrupt other development banks. We have been very warmly welcomed by them, and the European banks because they have seen the positive sign of collaboration.

We have been welcomed because there is a need for much more investment that we can contribute to. Sometimes we got calls from the World Bank and the ADB to let us know they have a great project in one of our countries, but they don’t have enough money to develop it.

You are preparing to issue bonds. How do you see European investors’ attitude toward your bonds and what amount are you aiming for?

We will go to the capital markets, use our AAA rate to raise funds, but we haven’t done so yet because we are well capitalized. We don’t require bond issuance to finance the projects we are committed to so far. No date or amount has been fixed yet, but we will be out in the markets in the not so distance future.

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