Statement delivered by Mr. Danny Alexander, Vice President, Policy and Strategy, Asian Infrastructure Investment Bank

V20 MINISTERIAL DIALOGUE VIII- 21 April, 2022

 Statements

10:00 pm Dhaka time/12:00 pm Washington DC time

Statement delivered by Mr. Danny Alexander, Vice President, Policy and Strategy, Asian Infrastructure Investment Bank

On behalf of the Asian Infrastructure Investment Bank (AIIB), I am delighted to join this event. Let me say thank you for this opportunity. The V20 is a potentially significant Market for the climate investment for the next decades being home to 1.2 billion people today, radical effort will be needed for short and long-term climate resilience to become a reality. The IPCC report on climate impacts and vulnerability released this year showed how climate change has affected every corner of the world and much more severe impacts are in store if we fail to halve greenhouse gas emissions this decade and immediately scale up adaptation. According to the UN, climate-related risks could cost the Asia and the Pacific region around a 160 billion USD per year by 2030. And given the disproportional impact of climate change on Asia and the Pacific Region, the AIIB has a key role to play in helping our members address adaptation and resilience needs. We have announced that we will align all of our new financing activities with the goals of the Paris Agreement by the first of July of 2023 and will ensure that at least 50% of our total investments are climate finance by 2025. To achieve this ambitious target, we will work continuously with partners across the region, supporting clients in meeting their long-term commitments as described in their Nationally Determined Contributions and the long term strategies, and with particular emphasis on those that are most marginalized and vulnerable to the impacts of climate change, so that we create space for all to be part of this much-needed climate solutions. We have already been screening each project’s climate risk at the project level and working together with clients to mitigate those risks. For example, we provided 280 million dollars to reduce landslide risk and support climate resilience disaster prevention in Sri Lanka. A rural water sanitation hygiene project in Bangladesh also incorporated robust adaptation measures to adjust the project’s vulnerabilities to sea-level rise and flooding. Despite a very challenging year in 2021, we achieved 48% of the climate financing, excluding our COVID-19 crisis recovery facility. We are also updating our energy sector strategy, with a particular emphasis on the importance of climate adaptation and the transition to a low carbon infrastructure. By investing into low carbon infrastructure, what looks like a challenge and can be turned into an opportunity to build back better. While infrastructure financing is the key to building back better, we also know that countries most vulnerable to climate change are facing multiple challenges, the COVID-19 pandemic has drastically increased the overall financing needs of low income countries. Rising economic vulnerabilities due to high public debts coupled with an increased demand of development expenditure adds to the needs for affordable financing to support the recovery efforts. The Global community, including the G20, has been calling for heightened efforts to provide concessional resources to lower income countries. To join this effort last month, AIIB established a special fund window for less developed members.  For the first time, with the support of donors, this new facility will enable us to offer more affordable loan pricing to those members. Combined with our project preparation special fund, which makes grants to support the preparation of high-quality projects, we hope this new facility will help to meet the needs of our least developed members and support the global effort for sustainable developments and to tackle climate change. Infrastructure is a crucial component of adaptive capacity and resilience. However, infrastructure is also impacted by climate change. Insisting on due consideration of climate proofing measures at project design, and helping our clients to identify appropriate options, is a key value-add that AIIB can deliver. Our mission is financing the infrastructure for tomorrow, infrastructure with sustainability at its core. I am looking forward to working closely with the V20 and V20 members to achieve these goals. Thank you very much.

[END]