Debated in Parliament on 16 Aug 2016.
Er Dr Lee Bee Wah asked the Minister for Finance (a) since the inception of the Asian Infrastructure Investment Bank, are there any infrastructure projects being planned; (b) what can local companies do to tap on the benefits that come with Singapore's membership; and (c) how will Singapore's economy benefit from this involvement in the long term.
Since its establishment on 25 December 2015, the Asian Infrastructure Investment Bank (AIIB) has been focusing on recruiting staff, putting in place financial and operational policies and developing a strong project pipeline.
AIIB has achieved some early success. The AIIB Board of Directors recently approved in June for the Bank to finance the first four projects worth over US$500 million. Three of the four projects will be co-financed with other multilateral development banks, namely, the Asian Development Bank, the European Bank for Reconstruction and Development, and the World Bank. These include (i) a motorway in Pakistan; (ii) a highway in Tajikistan, and (iii) a slum upgrading project in Indonesia. The fourth, financed entirely by AIIB, involves a power distribution system in Bangladesh.
More projects are being considered, with AIIB targeting to lend up to US$1.2 billion to finance five to 10 projects in 2016, and double that in 2017. Over the medium term, AIIB will also look to crowd-in funding from the private sector. This will contribute additional market expertise and financial discipline to the managing of future infrastructure projects.
AIIB is an important addition to the international financial architecture. Singapore has long-standing cooperation with other multilateral development banks like the World Bank and the Asian Development Bank. Joining AIIB further complements Singapore’s role as an international financial centre and an urban development hub for the region.
Asia's infrastructure needs are large and growing. Our companies can seek partnership opportunities with AIIB by bidding for infrastructure projects, or providing advisory services, such as project structuring and urban planning.
By investing in much-needed infrastructure in Asia, AIIB plays an important role in helping to increase the economic competitiveness and vibrancy of the region. An economically vibrant region, with greater trade, investment and business opportunities, will benefit Singapore as well as the companies based here.
PAPERCUTS