MANILA — The Asian Development Bank and the China-led Asian Infrastructure Investment Bank are all “part of the same family,” Thierry de Longuemar, AIIB chief financial officer, told Devex on Thursday.
“We all need each other,” de Longuemar said. “The infrastructure gap is huge, any newcomer is welcome. And so the spirit is to cooperate. It’s not only the spirit — because in fact we currently co-finance more than 75 percent of our projects with others.”
For its part, ADB doesn’t see AIIB as a rival, ADB President Takehiko Nakao added.
Publicly, the two banks are sticking to talking points of collaboration over competition at the ADB’s 51st annual meeting in Manila.
Still, de Longuemar pointed out that AIIB, which counts a lean staff of 150, has already received $12.5 billion of paid capital, compared to the $7.5 billion received by ADB over the past 50 years. In terms of financial capacity — and with a further $7 billion in paid capital by the end of the year — AIIB can claim the top spot until the new capital increase kicks in at the World Bank, he noted.
Devex caught up with du Longuemar at the ADB meetings to see what’s on his mind as the bank continues to move from concept to implementation, and what development professionals need to understand about its function. The conversation has been lightly edited for length and clarity.
What are your top priorities right now? What’s on your desk?
The first priority is to build the bank. There are things that people don’t realize — that when the bank opens, the entire plumbing needs to be put in place. There’s no IT infrastructure, there’s no payment systems, all the prerequisite to be a full-fledged bank needs to be built. It’s like an infrastructure project ... it takes seven to 10 years to build a road, a bridge, a power plant — although it won’t take that much time with the bank, it will take maybe three to five years.
Priority number two is to set up the strategic framework within which we are operating. Which means getting approval from our shareholders on the kind of strategy we want to support. We have already approved the energy strategy, transport strategy. So now if I talk about the energy strategy, which is public, it’s known that there are things we can’t do — like nuclear plants, coal finance in principle — though there may be exceptions in low-income countries.
Then we need to establish our name, both operationally and financially. We started to approve loans in June 2016 — we approved more than 30 at the end of last year for $4.2 billion. So we’re not in concept phase anymore; we’re in implementation phase.
How would you describe AIIB’s contribution to the Sustainable Development Goals?
We contribute to some of them. Because our focus is solely infrastructure, there are many things that we don’t do, such as health, social, education, capacity building. But still, we believe that by supporting sustainable infrastructure, it will support the economic development of countries.
Operationally, what should we be expecting coming down the line? Any changes?
It’s too early to say. We are still building the bank, so we can’t say it’s a change. From what to what? You need to strengthen the base first.
What do you think global development professionals still might not understand about AIIB?
There is one misunderstanding, which is the connection, if any, between AIIB and the Belt and Road Initiative. Many assumed — because the two initiatives were announced by the president of China in 2013 — that they were linked. Because of this perception, people felt AIIB is an instrument of the BRI.
We may engage in so-called “classified BRI projects” with three perquisites. First, they have to be financially viable. Second, they have to align with our strategies. Third, they have to comply with our environmental and social framework. Not so many BRI projects may fit within these requirements. We’ll see.
You spent years at ADB and before that the African Development Bank, prior to joining AIIB. What lessons are you bringing with you?
I started at the AfDB, I worked there 11 years — both as treasurer and vice president of finance. And I had the same role there as at ADB. When I joined the AfDB, it was 1996, nine months after the credit downgrade — it was a big mess. So I had to basically rebuild the entire finance function of the bank.
I think I drew from lessons from that period, the African Development Bank is a place where you learn. It’s not like ADB, where everything is clear, no surprises, everything is anticipated. The African Development Bank is the opposite. During my time there, I was able to recruit or promote a few people in the treasury department, and today four of them are treasurer of multilateral development banks.
The lesson is, that this particular activity at the African Development Bank is so tough that people who succeed there can do anything.