AIIB Eager To Support Azerbaijan's COP29 Goals - VP Ludger Schuknecht (Exclusive Interview) (PHOTO/VIDEO)

(MENAFN- Trend News Agency) BAKU, Azerbaijan, June 25. Through its projects, the Asian Infrastructure and investment bank (AIIB) aims to assist Azerbaijan in achieving its national agenda aligning with the goals of COP29, Ludger Schuknecht, Vice President, Corporate Secretary at the AIIB, told Trend in an exclusive interview.

"The focus of AIIB includes climate-friendly infrastructure, supporting climate change mitigation and adaptation. To achieve this objective, we are investing significantly in renewable energy and green infrastructure, which is our primary area of focus. Additionally, we are engaged in projects related to digital connectivity, such as upgrading communication networks, roads, railways, and ports, all while maintaining environmental sustainability. We are also pleased to discuss COP29, although preparations are ongoing and the agenda is still being finalized. Our purpose here is to understand Azerbaijan's priorities and explore how our bank can support Azerbaijan in achieving them," he said.

According to Schuknecht, the Paris Agreement is crucial in this regard, ensuring that all projects adhere to national commitments under it and meet high environmental, social, and governance standards. "These measures will enable the AIIB to support its member countries and clients in meeting their climate objectives".

"I believe that AIIB, along with our multilateral development partners like the World Bank and Asian Development Bank, will be prepared to support the agendas of COP29 and Azerbaijan. It's truly fantastic that Azerbaijan will host COP29. There will be a need to implement agreements from previous COPs, and naturally, there's always the aspiration to develop new ideas or plans. I think Azerbaijan is ideally positioned to facilitate such consensus-building efforts, bring stakeholders together, and align efforts towards shared goals," the VP added.

Ludger Schuknecht then spoke about the objectives of his visit to Azerbaijan. "The corporate secretary essentially serves as the link between our owners, the shareholders, and the management and operations of the bank. With this mandate, we ensure the smooth functioning of all board meetings and our flagship event, the annual meeting. We also prioritize member satisfaction, particularly ensuring that our board of directors is content. Lastly, it's important to note that the corporate secretary at the AIIB upholds high governance standards to maintain integrity in governance. COP29 is certainly the main event here in Azerbaijan. However, COP29 is one of the reasons I'm here. Another reason is the importance of visiting our shareholders periodically. This is my first visit, primarily because COVID-19 prevented us from traveling to meet our members, resulting in a backlog that we are now addressing. Additionally, we have the annual meeting in Uzbekistan scheduled for late September this year, which is nearby. We hope Azerbaijan will host a preparatory event for these annual meetings and ensure strong representation there".

Further speaking, Schuknecht noted that the AIIB works to contribute to the development of green finance in global financial markets. "On the financial side, the AIIB upholds high standards in environment, social, and governance criteria and requires Paris alignment. All the bonds we issue and the financing we provide are green and sustainable. Through our financing activities and fundraising efforts, we contribute to the development of green finance in global financial markets".

He explained that the bank, through its projects, engages in financial intermediation, which involves financing projects directly, as well as financing banks and other financial intermediaries.

"We provide equity, loans, and finance bonds to enable these institutions to finance high-quality, climate-friendly infrastructure. For example, one of our projects involves investing in adaptation by providing equity to companies striving to enhance climate change adaptation. We also manage a bond fund focused on purchasing bonds exclusively from firms that meet AIIB's ESG standards," the VP explained.

Moreover, AIIB supports companies in improving their standards and developing markets for green products, Schuknecht added. "For instance, we participate in securitization and equity investments. These financial instruments play a crucial role in promoting the transition to greener economies".

"We serve all our members. We have clients in middle-income countries and even some in higher-income countries. However, we are also committed to ensuring that low-income countries have access to funding from our bank. We need to balance this with the overall risk of our portfolio, so we can only allocate a limited amount of financing to such countries. Therefore, we prioritize working with better-rated countries for our projects," he pointed out.

To support lower-income countries, the AIIB provides financial assistance such as project preparation financing and concessional financing, the official added. "This support may come directly from us or from other member countries that contribute to these projects. While the assistance available for the poorest countries is limited, it does exist".

Wrapping up, the VP added that Azerbaijan, by hosting COP29 and with its ministries actively involved in leading negotiations, will position itself as a leader in the climate change agenda.

"Hopefully, Azerbaijan will also use this opportunity to develop and strengthen its climate-related infrastructure and capacities. Therefore, bringing people together, fostering consensus, and developing ideas under the COP29 agenda will be Azerbaijan's primary contribution in this regard. From AIIB's perspective, we are proud to be here, engaging in discussions and hopefully supporting Azerbaijan's agenda. In doing so, we aim to contribute to the conference objectives," Ludger Schuknecht concluded.

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