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AIIB giving $509m for four projects in Asia

Staff writer |
The Asian Infrastructure Investment Bank’s (AIIB) board approved its first 4 loans totaling $509 million to finance 4 projects.

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Three of the 4 projects are co-financing operations with multilateral development bank (MDB) partners.

The approved loans are:

- a $165 million loan for a Power Distribution System Upgrade and Expansion Project in Bangladesh;

- a $216.5 million loan for a National Slum Upgrading Project in Indonesia, expected to be co-financed with the World Bank;

- a $100 million loan to finance the Shorkot-Khanewal Section of National Motorway M-4 in Pakistan, co-financed with the Asian Development Bank (ADB) and the United Kingdom’s Department for International Development (DFID); and

- a $ 27.5 million loan for the Dushanbe-Uzbekistan Border Road Improvement Project in Tajikistan, co-financed with the European Bank for Reconstruction and Development (EBRD).

The Bank, which supports infrastructure development and regional connectivity in Asia, is targeting lending of approximately $1.2 billion in 2016.

A $165 million loan to Bangladesh for a Power Distribution System Upgrade and Expansion Project is designed to expand electricity coverage by providing 2.5 million new service connections in rural areas, and to upgrade two grid substations and convert 85 circuit-km overhead distribution lines into underground cables in northern Dhaka.

The Project will supplement the Bank’s development partner efforts by providing additional financial resources to connect more rural and urban consumers, further reduce distribution losses, and improve the quality and reliability of power supply in Bangladesh.

The Project, upon completion, is expected to benefit about 12.5 million people in rural areas and therefore create a significant and sustained impact on many economic and social dimensions of rural development in Bangladesh.

A $216.5 million loan to Indonesia for a National Slum Upgrading Project aims to improve access to urban infrastructure and services in targeted slums in Indonesia. This financing supports the Government’s program of urban slum infrastructure investment in the central and eastern parts of the country.

The project will finance institutional strengthening and capacity building for the responsible ministries and agencies and sub-projects will support primary and secondary infrastructure improvement and site development, and select construction.

The project also provides contingency financing for disaster response. Direct and indirect beneficiaries of the project are expected to include 9.7 million slum dwellers living in 154 cities.

Slum dwellers are likely to experience significant betterment of living conditions due to improvements in access to urban infrastructure and services. The Project is expected to be co-financed by the World Bank which will be the lead co-financier.

A $100 million loan to Pakistan supports the construction of the last remaining section (Shorkot-Khanewal) of National Motorway M-4 in Punjab province. The 64 km four-lane, controlled access segment will enhance connectivity, and provide a more efficient, cost-effective and safer transport route connecting Islamabad, Faisalabad, and Multan. When this project is completed, the entire M-4 will be fully operational.

The M-4 Motorway forms a part of the north-south transport corridor that links Pakistan’s main centers of economic activity, from Torkham, on the northern border with Afghanistan, to the port city of Karachi.

The project is co-financed with a $100 million loan approved by the Asian Development Bank's (ADB) Board of Directors. The United Kingdom's Department for International Development (DFID) is providing a $34 million equivalent grant for the project. As lead co-financier, ADB will administer the ADB and AIIB loans and the DFID grant.

A $27.5 million loan to Tajikistan for the Dushanbe-Uzbekistan Border Road Improvement Project is designed to increase connectivity and mobility along the Tajikistan section of the Central Asia Regional Economic Cooperation Corridor 3, a vital trade corridor, through the rehabilitation and upgrade of the 5 km section of the road connecting Dushanbe to the border with Uzbekistan, from the Avicenna Monument to the West Gate in Dushanbe.

The project will help increase national and regional trade, reduce traffic congestion and improve road safety. It is co-financed with the European Bank for Reconstruction and Development (EBRD) as lead co-financier with a $27.5 million loan.

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