Sessions

2019 July 12 Friday

Roundtable on Exploring Opportunities of Concessional Financing and Grant Cooperation with AIIB (By Invitation)

Salle B, ECCL

Objective

  • Brainstorm opportunities for AIIB to partner with Development Finance Institutions (DFIs) in blending concessional financing and grants with AIIB financing, and the possible modalities of such cooperation. 
  • Representatives of DFIs and select client countries will share experiences and perspectives on key issues in concessional finance and its impacts in supporting infrastructure programs. 
  • The results will inform a concept note that identifies opportunities, challenges, lessons, and recommendations for AIIB.   

 

Background

Concessional financing and grants are important development finance instruments to alleviate the constraints of some countries/clients in accessing financing. Effective utilization of these financial instruments can add value to our clients and maximize development impact, especially in areas where access to private capital markets is limited, or where market conditions may be challenging. For example:

 

•  Concessional financing and grants can help public infrastructure investments with high impact but modest potential for revenue generation e.g. water and sanitation, and shareholder countries with limited ability to afford non-concessional financing 

•  Clients, especially in lower income countries, often need support throughout the project cycle beyond the project preparation phase. 

•  Blended finance can help diversify resources for projects, with concessional resources supporting technical assistance essential to go beyond ‘do-no-harm’ and achieve positive impact, such as in climate change, gender, institutional strengthening 

•  Concessional instruments, if blended effectively, can help mobilize private sector investment in high-risk / high-impact projects in developing countries.

 

There is already a vibrant community of development finance institutions (DFIs) in Europe and Asia that provide various concessional financing and grants. Some DFIs have approached AIIB to explore avenues of cooperation and partnership and some are already working with AIIB in the preparation of co-financed projects. By partnering with AIIB, DFIs can achieve greater leverage of their financing towards sustainable infrastructure development. 

 

 

Attendance:

By invitation only. Members of Official Delegation and IAP members are welcome to attend to observe the session