{"id":607164,"date":"2023-09-27T00:00:00","date_gmt":"2023-09-27T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/sustainability-connectivity-and-multilateral-cooperation-dominated-the-discussions-at-aiibs-annual-meeting-in-sharm-el-sheikh\/"},"modified":"2023-09-27T00:00:00","modified_gmt":"2023-09-27T00:00:00","slug":"sustainability-connectivity-and-multilateral-cooperation-dominated-the-discussions-at-aiibs-annual-meeting-in-sharm-el-sheikh","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/sustainability-connectivity-and-multilateral-cooperation-dominated-the-discussions-at-aiibs-annual-meeting-in-sharm-el-sheikh\/","title":{"rendered":"Sustainability, connectivity, and multilateral cooperation dominated the discussions at AIIB\u2019s annual meeting in Sharm El Sheikh"},"content":{"rendered":"

It\u2019s a wrap on the AIIB\u2019s annual meeting: <\/strong>The Asian Infrastructure Investment Bank\u2019s (AIIB) annual meeting \u2014 which wrapped in Sharm El Sheikh yesterday \u2014 took place this year under the theme \u201csustainable growth in a challenging world.\u201d 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. <\/p>\n

The big takeaway: There\u2019s a global infrastructure financing gap, and we\u2019re going to need <\/strong> to get creative with funding solutions. <\/strong>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.<\/p>\n

Remember: <\/strong> AIIB <\/strong> is providing some USD 1 bn of financing to Egypt <\/strong> : <\/strong>The multilateral development lender has officially announced its plan to invest USD 1 bn in Egypt, reflecting AIIB\u2019s commitment to advancing economic development here, Vice Minister of Finance Minister Ahmed Kouchouk told us last week<\/a>. <\/p>\n

Where the money is <\/strong> going? <\/strong>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<\/a> and a non-sovereign financing agreement with Banque Misr worth USD 300 mn to back sustainable infrastructure projects, according to Al Ahram<\/a>. AIIB had also previously said<\/a> it would provide EUR 250 mn in financing for the redevelopment of the Abu Qir railway in Alexandria.<\/p>\n

There\u2019s also growing potential here for c <\/strong> ross-border infrastructure projects: <\/strong>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.<\/p>\n

Private-sector participation in the economy was a big topic <\/strong> , <\/strong> 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.<\/p>\n

What will unlock the potential of the private sector? <\/strong> 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<\/a>) 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<\/a>) said. Risk alignment is also a priority for the private sector, said Joachim von Amsberg (Linkedin<\/a>), a special advisor to AIIB\u2019s president. Von Amsberg stressed the importance of making the economics make sense on private sector players\u2019 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. <\/p>\n

All of this growth needs to be sustainable. <\/strong> Blended finance can help with that: <\/strong>International Cooperation Minister Rania Al Mashat emphasized the importance of blended<\/a> finance<\/a> \u2014 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 \u2014 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.<\/p>\n

ALSO FROM THE MEETINGS- AIIB launches its climate action plan: <\/strong> The MDB unveiled its climate action plan (CAP)<\/a> which is set to guide AIIB's climate initiatives from 2024 to 2030, and consolidate the lender\u2019s climate financing principles while identifying critical areas of action that will shape its investments in support of its member countries.\u201dThe CAP demonstrates AIIB's ambition to mobilize our capital, capacity, and convening power to help our members in their efforts to address climate change,\u201d said AIIB President and Chair of the Board, Jin Liqun.<\/p>\n

AND- AIIB welcomed three new member countries <\/strong> as its board approved applications from El Salvador, Tanzania, and Solomon Islands. <\/p>\n

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Your top infrastructure stories for the week: <\/strong><\/p>\n