The Asian Development Bank (ADB) will act as the lead financier for the M4 Highway project in Pakistan, a 64-kilometer stretch of motorway connecting Shorkot to Khanewal in Pakistan’s relatively better developed Punjab province.
The second, a road linking Dushanbe in Tajikistan with the Uzbek border, will be jointly financed by the AIIB and EBRD. In a recent statement, the AIIB said: “EBRD’s Board of Directors has just approved the project for financing, and AIIB’s Board is expected to consider AIIB financing in June.” The statement added that the two banks were considering more infrastructure projects in Central Asia as well.
Still Central Asia and Pakistan are the two closest and most important paths through which China’s massive One Belt, One Road project will pass. Both the projects will reinforce existing road links from China. The Punjab project is part of the $46 billion China Pakistan Economic Corridor launched by President Xi last year. There is an existing road, AH66, that runs from Dushanbe to China’s Xinjiang province before connecting to the Karakoram Highway that connects China to Pakistan.
The World Bank has also entered into a co-financing deal with the AIIB although it is not yet known what kind of projects it will choose to fund. In case the World Bank agreed to support a project, analysts said, the ambitious Chinese programme would end up obtaining one of the highest forms of endorsements which could open up many other financial options.
The One Belt, One Road policy, which has been spearheaded by Xi Jinping, is one of his key agendas as China’s leader. The project is a combination of a new plan which seeks to link China’s western region with Central Asia, Europe and the Middle East. The maritime trade routes, or Belt, pass through Southeast Asia and on to Africa.
“It is possible that the AIIB chooses to co-finance its first project in Pakistan with the ADB in an effort to assuage suspicions that the project reflects China’s geopolitical priorities,” said Paul Haenle, Director of the Beijing-based Carnegie-Tsinghua Center for Global Policy.
“But he thinks that the new bank, which has 57 member countries, should be judged only after it has conducted more lending operations. It is essential to wait and see if the AIIB finances projects outside the Belt and Road Initiative,” he said.
The Beijing-backed Asian Infrastructure Investment Bank (AIIB) has chosen two projects to sponsor for its first foray into infrastructure investment and both are linked to Chinese President Xi Jinping’s new plan.
But in an apparent move to help deflect criticism that AIIB has a political agenda, the Asian Development Bank and European Bank for Reconstruction and Development, are co-sponsoring the projects, analysts said.
