It’s a wrap on the AIIB’s annual meeting: The Asian Infrastructure Investment Bank’s (AIIB) annual meeting — which wrapped in Sharm El Sheikh yesterday — took place this year under the theme “sustainable growth in a challenging world.” The meeting, which Enterprise attended, brought together global leaders, members of the business community, players in the finance industry, and policymakers to discuss pressing issues related to infrastructure finance and development.

The big takeaway: There’s a global infrastructure financing gap, and we’re going to need to get creative with funding solutions. Leaders and experts acknowledged the challenges of the current global landscape and reiterated their commitment to bridging the infrastructure financing gap. They stressed the importance of collaboration between the public and private sectors and the need to be innovative on financing solutions. In speaking about infrastructure financing and the openings available for private sector players about emerging markets, the discussions underscored sustainability, connectivity, and multilateral cooperation as underlying themes.

Remember: AIIB is providing some USD 1 bn of financing to Egypt : The multilateral development lender has officially announced its plan to invest USD 1 bn in Egypt, reflecting AIIB’s commitment to advancing economic development here, Vice Minister of Finance Minister Ahmed Kouchouk told us last week.

Where the money is going? This funding includes a USD 200 mn guarantee for our maiden USD 500 mn CNY-denominated panda bond issuance, Kouchouk told us last week. The bank is also look at as much as USD 140 mn in financing for the Damietta Port and a non-sovereign financing agreement with Banque Misr worth USD 300 mn to back sustainable infrastructure projects, according to Al Ahram. AIIB had also previously said it would provide EUR 250 mn in financing for the redevelopment of the Abu Qir railway in Alexandria.

There’s also growing potential here for c ross-border infrastructure projects: Egypt enjoys a strategic location as a hub for trade, giving it significant potential for cross-border infrastructure projects, Finance Minister Mohamed Maait said in Sharm. Maait was speaking on a panel that explored the potential of cross-border infrastructure as a catalyst for economic growth, particularly as drivers of job creation and export. Maait also stressed how important multilateral development banks are in helping the private sector capital access the capital it needs to grow.

Private-sector participation in the economy was a big topic , with participants on another panel hearing that governments and multilateral organizations need to help create an environment that allows private businesses to flourish. Business leaders also want access to affordable finance. But for all of that to happen, governments and business need to align on risks and build mutual trust.

What will unlock the potential of the private sector? Private sector involvement in infrastructure development projects requires, first and foremost, a favorable policy environment in which governments provide both a degree of certainty and adequate incentives for participation, Afreximbank Director of Guarantees and Specialized Finance Kofi Asumadu (Linkedin) said. Governments need to work with financial institutions to facilitate this participation, Asumadu said. This favorable environment also creates trust, which further encourages private sector investments, International Finance Corporation Director Ousseynou Nakoulima (Linkedin) said. Risk alignment is also a priority for the private sector, said Joachim von Amsberg (Linkedin), a special advisor to AIIB’s president. Von Amsberg stressed the importance of making the economics make sense on private sector players’ return on risk. Nakoulima also touched on how providing clear guidelines and predictable regulations can unlock more financing and debt instruments, such as green bonds.

All of this growth needs to be sustainable. Blended finance can help with that: International Cooperation Minister Rania Al Mashat emphasized the importance of blended finance — development-speak for using money from a multilateral development-focused financial institution to attract private capital for a project or investment by effectively de-risking it — to ensure sustainable growth and help bridge financing gaps. Al Mashat stressed that quality and quantity of finance are essential for climate agendas in particular and called for coordinated efforts between financial institutions to secure concessional finance.

ALSO FROM THE MEETINGS- AIIB launches its climate action plan: The MDB unveiled its climate action plan (CAP) which is set to guide AIIB’s climate initiatives from 2024 to 2030, and consolidate the lender’s climate financing principles while identifying critical areas of action that will shape its investments in support of its member countries.”The CAP demonstrates AIIB’s ambition to mobilize our capital, capacity, and convening power to help our members in their efforts to address climate change,” said AIIB President and Chair of the Board, Jin Liqun.

AND- AIIB welcomed three new member countries as its board approved applications from El Salvador, Tanzania, and Solomon Islands.

Your top infrastructure stories for the week:

  • The race for the contract to build the Cairo-Alex freight rail link: The Transport Ministry is gearing up to launch a tender for the planned Cairo-Alex andria freight railway bypass in 1Q 2024.
  • IFC funding for the Damietta cargo terminal: The International Finance Corporation is considering extending a USD 125 mn loan to fund the construction of Damietta Port’s second container terminal.
  • Adnoc in Egypt: The distribution arm of the Abu Dhabi National Oil Company (Adnoc) has opened three service stations in Egypt.
  • West Cairo BRT? The Institute for Transportation and Development Policy has signed a consultancy agreement with the New Urban Communities Authority to advise on implementing a bus rapid transit (BRT) system between Sixth of October City and parts of Giza governorate.
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