AIIB SUSTAINABLE DEVELOPMENT BONDS
IMPACT REPORT 2023

The year 2023 marks another significant milestone for the Asian Infrastructure Investment Bank (AIIB or the Bank) as we continue our journey of fostering sustainable development in Asia and beyond. As we reflect on the Bank’s transition from the start-up phase to the fast-growth phase, we are proud of the development impacts we have made in 36 of our 109 Members. The expansion of AIIB to 109 approved Members is a testament to its robust and adaptable operational and governance framework. This growth reflects the strong commitment to the Bank’s mandate of financing Infrastructure for Tomorrow, focusing on investments that are sustainable, inclusive, and innovative. By prioritizing sustainability and environmental responsibility, the Bank is not only contributing to the global effort against climate change, but also setting a standard for the financial industry. The ability to adapt and evolve with the changing needs of our planet is crucial, and the Bank’s dedication to this cause is commendable. This ensures that AIIB remains relevant and impactful in a rapidly evolving world. At the same time, our Members continue to face an evolving plethora of challenges. Instability, higher interest rates, strained fiscal budgets, and the damage of climate change are intensifying, with lasting effects across the world. The Bank must not rest where it stands today; it must look forward and face head on the existential need for financing green infrastructure, technology, and connectivity to tackle climate change.

The past decade has been marked by intense climate events: wildfires, hurricanes, droughts, floods, and extreme temperatures. Such severe weather events across the world underscore the urgent need for comprehensive climate action. As a multilaterial development bank (MDB), AIIB regards its commitment to accelerating investment in projects for climate adaptation and mitigation as crucial. By focusing on sustainable practices and supporting initiatives that address the impacts of climate change, the Bank can play a pivotal role in fostering resilience among its Members, particularly in highly vulnerable regions. This proactive approach not only aids in risk management, but also contributes to the global effort to create a more sustainable and equitable future. One of the ways AIIB has demonstrated its intent to Members and partners is the publication of our Climate Action Plan (CAP). The plan outlines our ambition to bring capital, capacity, and convening power to help our Members in their efforts to address climate change. Designed to guide AIIB’s climate ambition from 2024 to 2030, the CAP brings together the principles governing the Bank’s climate financing while identifying crucial action areas that will steer AIIB’s investments in support of its Members.

AIIB had a corporate target of a 50% share of climate finance in AIIB’s annual financing approvals by 2025, but already surpassed that target in 2022. The efforts we made in 2023 have reaffirmed this target, and AIIB approved USD3.4 billion in climate finance, out of total regular financing approvals of USD5.7 billion.

AIIB took a significant step by aligning all its new investment operations with the goals of the Paris Agreement starting on July 1, 2023. This strategic move ensures that AIIB's projects support low-carbon and climate-resilient development, reflecting a commitment that transcends mere compliance. By adopting the joint MDB methodological framework, AIIB not only adheres to international climate goals, but also adds value through its investments, fostering sustainable economic growth and resilience in the face of climate change.

2023 also marks AIIB’s fifth year as an issuer in the global capital markets. AIIB’s Sustainable Development Bonds offer investors opportunities to invest in positive change in infrastructure financing, both in terms of environmental stewardship and socioeconomic development. As transparency and accountability remain paramount for investors, AIIB’s fourth Sustainable Development Bonds Impact Report proudly highlights transformative projects that contribute to the United Nations Sustainable Development Goals (SDGs), reflecting the Bank’s dedication to meeting Members’ needs and generating positive environmental and social outcomes. Through transparent reporting mechanisms and robust impact assessment, AIIB is not just financing infrastructure, but also fostering sustainable and inclusive development, aligning with global efforts to create a greener, more equitable future.

Jin Liqun
President and Chair of the Board of Directors

The central objective of our Sustainable Development Bond Framework and the annual Impact Reports is to increase transparency and draw attention to our projects and their impacts. In this report, you will find detailed statistics that illustrate our commitment to the United Nations Sustainable Development Goals (SDGs) and our alignment with the Paris Agreement. Specifically, let me highlight the fact that 62% of the projects approved by AIIB in 2023 are contributing to SDG 13: Climate Action. This metric represents our tangible impact on sustainable infrastructure, reinforcing our commitment to fostering social, economic, and environmental well-being.

The pressure of climate change is mounting on our Members and our operations. Our projects must be climate resilient and adaptive to the stresses caused by climate change. To raise awareness of the critical importance of climate-resilient infrastructure, the Asian Infrastructure Investment Bank (AIIB) issued its first climate adaptation bond in May 2023 with an AUD500 million new issue. This bond was the first climate adaptation-themed bond in the AUD market. It provided a unique opportunity for AIIB and investors to highlight the critical importance of climate adaptation investments and direct funding to address this specific objective. The climate adaptation has garnered strong demand from domestic and offshore investors, many citing the theme as their reason for participating. AIIB has also attracted new investors, thanks to this transaction. The strong demand was evidenced by subscriptions that amounted to 2.2 times the normal rate.

In this year's Sustainable Development Bonds Impact Report (Impact Report), investors will find the projects eligible for allocations under AIIB’s climate adaptation bond and learn about their potential environmental and social impacts.

2023 was the year that AIIB navigated its largest borrowing program, raising USD10 billion under its Sustainable Development Bond Framework. This Impact Report provides an overview of AIIB’s borrowing programs and how proceeds are disbursed across AIIB projects. Our Framework allows the continuation of our commitment to sustainable development that encompasses the Bank's four thematic priorities: Green Infrastructure, Connectivity and Regional Cooperation, Technologyenabled Infrastructure, and Private Capital Mobilization.

Our Impact Report plays a crucial role in providing transparency regarding the utilization of investors’ capital. The enhanced analytics featured in this report contribute to a deeper understanding of climate and development. This, in turn, aids in identifying risks and opportunities, reinforcing our ability to attract private capital at scale.

Learn more about AIIB’s Sustainable Bond Framework and the impact of AIIB Financing on AIIB's YouTube channel.

Domenico Nardelli
Treasurer