Article by: Karin Costa Vazquez, Fudan University; and Gregory T. Chin, York University
This essay examines the AIIB’s approach to investing in sustainable infrastructure (SI). The main argument is that the AIIB is taking a hybrid layered approach to SI investment. On the one hand, the Bank is following the ‘do no harm’ pathway of the traditional MDBs, of using safeguards to avoid and compensate adverse social and environmental impacts. On the other hand, it is pursuing innovation, and a more transformative agenda, that encourages investment in SI projects that generate broader, positive developmental spillovers. In pursuing its hybrid agenda, the AIIB is developing its own multi‐layered safeguards regime to ensure smooth and strong SI investment, and alignment between the Bank’s overarching strategic policy, its ESF, sector and thematic strategies, and projects. The analysis also details three ways in which the AIIB stands out from other MDBs for how it is ‘trying new things’ with its approach to SI investment: first, is how ‘economic sustainability’ is one of the main considerations for project selection alongside environmental, social and governance sustainability; second, how the Bank has integrated social and indigenous and oversight safeguards into its ‘environmental and social framework’ (ESF); third, its creation of large‐scale public‐private Funds for green finance and climate finance.
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