Africa bank chief wants to work with China-led AIIB

The head of the African Development Bank welcomed the China-led Asian Infrastructure Investment Bank and said he hoped the two institutions could work together to plug the funding gap for infrastructure in African countries.

Worried about China’s growing diplomatic clout, the United States has been urging countries to think twice about joining the recently formed AIIB, arguing that its projects may not adequately safeguard the environment and people.

But more than 50 countries, including the United States’ European allies Britain, France and Germany, have this year rushed to join China’s initiative, a $50 billion (£33.81 billion) multilateral infrastructure bank that plans to start providing project loans to countries across Asia from the end of 2015.

Donald Kaberuka, the president of the African Development Bank, said he hoped the AIIB could also expand its mandate to Africa and help with the continent’s estimated $50-billion annual infrastructure funding gap.

“We’re hoping that this bank takes a broader view of funding infrastructure in Africa, in Asia, and even a few countries in Latin America, why not,” Kaberuka said in an interview late on Monday, ahead of the IMF and World Bank meetings in Washington.

“I think we need to embrace it, and ensure that we work together to expand its mandate to other parts of the world,” he said about the AIIB.

His comments come after World Bank President Jim Yong Kim last week also said he plans to work with the China-led bank and seek to ensure it adheres to environment and social standards.

Member nations of the AIIB will meet in Washington this week to discuss the new bank’s shareholding structure, amid concerns China could have outsized influence on the initiative, sources said.

Most analysts believe the AIIB will have to work with established institutions for at least its initial investments, as it takes time to develop a pipeline of infrastructure projects.

Kaberuka said co-financing projects with the AIIB could ensure it follows the same rules for protecting people and the environment as existing development banks.

The AIIB’s interim chief has also sought to play down concerns over its transparency and standards, saying it will be lean, clean and green.

“I’m sure working together, we can all get it right in terms of the environment and governance,” Kaberuka said.

Source: http://uk.reuters.com/article/2015/04/14/uk-asia-aiib-africa-idUKKBN0N520T20150414