(MENAFN) The Asian Infrastructure Investment Bank (AIIB), headquartered in Beijing, is currently engaged in discussions to offer a second loan guarantee arrangement to the World Bank. This potential agreement signifies a deepening of the partnership between these two prominent lenders and could enable the Washington-based World Bank to expand its lending activities.
Building upon a previous agreement forged last year, the AIIB is considering providing credit guarantees amounting to $1 billion. In return, these guarantees would back sovereign loans extended by the International Bank for Reconstruction and Development (IBRD), the lending arm of the World Bank. The initial deal aimed to leverage the liquidity-constrained balance sheet of the IBRD, thereby facilitating increased lending capabilities.
The ongoing negotiations between the AIIB and the World Bank reflect a broader trend of enhanced cooperation among multilateral development banks. As these institutions face pressure to overcome stringent capital constraints, there's a growing imperative to mobilize financial resources to address pressing global challenges, notably climate change.
Jin Liqun, President of the Asian Infrastructure Investment Bank, emphasized the institution's willingness to collaborate further, stating that discussions are also underway with other development banks such as the Asian Development Bank and the Inter-American Development Bank for similar initiatives.
Expressing support for the potential collaboration, Liqun highlighted the mutual recognition of the World Bank's need for expanded lending capacities and the AIIB's readiness to assist. He underscored the ongoing efforts of both teams to explore the feasibility of another guarantee project, indicative of a shared commitment to advancing development goals.
MENAFN07042024000045015682ID1108067744
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.