AIIB's Strategic Investments Aimed At Boosting Central Asia's Connectivity - Runze Yu (Exclusive Interview)

(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 10. Asian Infrastructure investment bank (AIIB) is commited to enhancing transport infrastructure across Central Asia, Runze Yu, Investment Operations Specialist at the AIIB, told Trend in an exclusive interview.

Runze Yu emphasized the importance of Central Asia, and Uzbekistan, in particular, as a key client for the bank and outlined ongoing efforts to improve connectivity.

“In this country, we have a robust program in the road sector,” Yu noted, referencing the bank's current project in the Bukhara region, which involves the construction of 78 kilometers of the A380 international highway. He further added that AIIB is developing a new initiative focused on local roads to ensure that the benefits of development reach a broader audience.

In addition to road infrastructure, AIIB is actively engaged in the rail sector, having participated in Uzbekistan's rail electrification initiatives.“We are very optimistic about the trend of mobility electrification in Uzbekistan, including electric vehicles (EVs) and charging infrastructure,” he stated.

AIIB's involvement extends beyond Uzbekistan, with transport projects underway in Tajikistan, where the bank is constructing bridges to enhance critical connectivity. In Kazakhstan, AIIB is also working on additional transportation projects in the road sector.

Yu emphasized AIIB's keen interest in participating in the electrification of mobility.“We are currently trying to engage the relevant government authorities to understand the big picture, as it seems that this effort is still very much driven by the private sector rather than the government,” he explained. The bank is in discussions with key stakeholders to identify appropriate projects and entry points for its involvement, whether they be sovereign or private sector initiatives.

In Uzbekistan, AIIB is part of a three-year rolling program with the government valued at around $4 billion, with an estimated 25% to 30% of that portfolio allocated to the transport sector.“To increase our portfolio, I think the opportunity is there, but we also need to discuss with the government how we can systematically address the challenges,” Yu remarked.

One significant challenge Yu identified is the communication barrier among stakeholders.“I keep saying that we have the capacity and knowledge here, but it seems that information is not really flowing between different stakeholders,” he said. He believes that Multilateral Development Banks (MDBs) can play a convening role in bringing all stakeholders to the same table to share information and ensure cross-referencing among them.“I would say that this is the number one challenge I'm facing right now,” he added.

Since July 1st of last year, AIIB has committed to aligning its projects with the Paris Agreement.“All of our projects are currently subject to assessment for Paris Agreement alignment,” Yu stated. He expressed confidence in the bank's adherence to these guidelines, noting that all project team leaders are well-versed in the methodology used to design, structure, and assess projects. “With these guidelines, I am confident that we are now 100% aligned with the Paris Agreement, which also facilitates tangible climate financing for our clients,” he affirmed.

Yu emphasized the need to return to the basics when evaluating cross-border international corridors, stating,“We should always look at the volumes and how they are growing or decreasing.” Understanding the composition of these volumes-where they originate and their destination-will help AIIB provide the best solutions. For example, rail may be suitable for bulk commodities, while freight or passenger vehicles may be better for logistics or passenger transport.

AIIB closely monitors developments along the middle corridor, focusing its investments on key milestones or bottlenecks in the area. Engaging with the government to understand their needs is crucial, as Yu noted,“There are definitely vast opportunities ahead.”

He expressed optimism regarding the international consensus on climate action, stating,“I think we are very glad that there has been an international consensus on the need to act together against climate vulnerability and risks.” Yu sees the upcoming COP29 as a vital platform for shaping this consensus.“As financiers, we must remember that the ownership of the projects belongs to our member countries and our clients,” he said.

In conclusion, Yu stressed the importance of a humble, service-oriented approach.“We should ensure that our financing is directed toward the most needed investments,” he stated. However, he also highlighted the diverse challenges different countries face, asking,“How do we integrate this global momentum with local contexts?” He believes that addressing this challenge is crucial, especially at the project level, where his work is primarily focused.

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