Aligning the Asian Infrastructure Investment Bank (AIIB) with the Paris Agreement and the SDGs: Challenges and Opportunities

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This report aims to promote the incorporation of sustainability and climate resilience into investment principles and policies of the Asian Infrastructure Development Bank (AIIB), a multilateral development banks co-led by China, which could help capital markets allocate more resources to environmentally friendly, climate-resilient and low-carbon infrastructure investments. The report evaluated whether the Asian Infrastructure Investment Bank has lived up to its promise to be ‘Lean, Clean and Green’ by analyzing the alignment with Paris Agreement and SDGs of AIIB’s environmental and social related strategies and policies, and project implementations.

  PDF Publication date: 2019.04  


This report aims to promote the incorporation of sustainability and climate resilience into investment principles and policies of the Asian Infrastructure Development Bank (AIIB), a multilateral development banks co-led by China, which could help capital markets allocate more resources to environmentally friendly, climate-resilient and low-carbon infrastructure investments. The report evaluated whether the Asian Infrastructure Investment Bank has lived up to its promise to be ‘Lean, Clean and Green’ by analyzing the alignment with Pais Agreement and SDGs of AIIB’s environmental and social related strategies and policies, and project implementations.


AIIB has started its work in 2016 with the mission ‘to improve economic and social development in Asia and beyond through a focus on sustainable infrastructure, cross-border connectivity and private capital mobilization’. By the end of 2018, after three years of operation, AIIB had a multibillion (in USD) portfolio of 34 approved projects, with a further 23 formally proposed projects in the pipeline.


The goal of the AIIB is to contribute to closing the financing gap for infrastructure investment and it has committed to do so in a Paris-aligned way. As infrastructure is often long-lived and emission intensive, it can determine the volume of emissions for decades to come. Therefore, it is the type and quality of new infrastructure investments which will define whether pathways compatible with global climate goals will be achieved.


To put its sustainability narrative into action, AIIB’s operations and investments will need to align with the Paris Agreement, most notably its goal to limit average temperature rise to well below 2°C and to pursue efforts to limit it to 1.5°C. In order to operationalise its investment strategies and project-level decisions with such an alignment, the bank will need a respective mandate, clear policies and criteria for investment decisions, respective assessment tools, institutional frameworks and rules of procedure.


With this paper we are aiming to:


1. Providing a number of Paris temperature goal-aligned criteria that could be used by AIIB and its stakeholders as the first step in Chapter 1;


2. Providing an overview of the thematically relevant AIIB strategies and policies, before assessing them against the criteria outlined in Chapter 1. Chapter 2 also covers the AIIB Environmental and Social Framework (ESF), and includes, where appropriate, references to good practice examples from other MDBs;


3. The third chapter begins with a short analysis of the AIIB project portfolio, looking at it from the angle of Paris temperature goal-aligned criteria. We then describe some preliminary lessons learned from selected projects in India and Bangladesh that have been co-financed by AIIB. This is embedded in further reflections on how AIIB is perceived and how it has already managed to shape the discourse on sustainable infrastructure development, covering experiences from Bangladesh, China, India, Russia and Germany;


4. The final chapter provides concluding observations and policy recommendations on how to strengthen the alignment of AIIB investments with the Paris Agreement goals, particularly the goal of limiting average global warming to 1.5°C, and with the Sustainable Development Goals, building on existing policies, strategies, safeguards and tools.


Led by Germanwatch, together with The Center for Participatory Research and Development (CPRD), LAYA, Indian Network on Ethics and Climate Change (INECC), The Russian-German Office for Environmental Information (RNEI), Greenovation Hub has co-conducted the report. Greenovation Hub contributed in the third chapter on AIIB projects and the AIIB discourse in selected countries, which introduced the AIIB discourse in China in the context of the ‘Belt and Road Initiative’.