China invests in the Philippines
The AIIB has approved a total investment of 500 million USD for the Metro Manila Regional Flood Control Project in the Philippines. This makes China the leading lender to the Philippines for the first time. The project is co-financed by the AIIB, the World Bank and the Philippines Government. The flood control project aims to create new pumping stations and support to waterways within the metro system, and is slated for completion by May 2024. On Sept. 27, the AIIB gave its 207.6 million USD share. Read more here.
China and the Philippines signed a deal in March to boost cooperative development in the Philippines as part of the Six-Year Development Program for Trade and Economic Cooperation. Since then, the two countries have agreed to fast track the process and boost development projects. This includes development transportation infrastructure like rail and airports, as well as irrigation systems to aid agricultural development in the Philippines. Read the more here.
Developing Asian Infrastructure
The AIIB announced on Sept. 29 that it would invest 150 billion USD into the International Finance Corporation's Emerging Asia Fund to address the infrastructure gap in Asia.
Investing in Sri Lanka’s Solar Power
The ADB has approved a 50 million USD loan Rooftop Solar Power Generation Project in an effort to help Sri Lanka's booming energy sector diversify. This loan will be primarily focused on ensuring clean energy for the country.
Energy Projects in India
The ADB and the AIIB are co-financing a 150 million USD electrical power project in India. The project will support building and installing five power transmission lines, which will connect to the long-distance grid systems already funded by the ADB. India's state-owned power company, Power Grid will foot the remainder of the bill, roughly another 150 million USD.
The AIIB and ADB are cooperating for the fourth time to carrying out a joint-financed project supporting India’s Green Energy Corridor. The project promotes the use of clean energies like solar and wind energy. The AIIB is investing 100 million USD and the ADB is investing 50 million USD. Read more here.
The ADB warns against optimism
China continues to provide funds to help develop its neighbors and close the development gap as their economy continues to grow. However, the ADB cautions against an overly optimistic outlook of the region’s financial future, with the lingering memories of the Asian Financial Crisis. The ADB advises Asian nations to be wary of reverse flows in capital out of the region, namely to the US, The bank is also concern of the increasing debt level in many the organization’s member states, and suggests that Asian nations should pursue broad-based reforms that safeguard for financial stability.
Export-Import Bank invests in Nigerian infrastructure
The Export-Import Bank of China gave 5.9 billion USD in loans to Nigeria to build rail links between 36 regional capitals, a project that is expected to cost up to 20 billion USD. The China Civil Engineering and Construction Corporation will handle construction. The AIIB and World Bank are co-financing the project.
The Export-Import Bank of China is financing a hydropower plant and dam system in Nigeria. The China Civil Engineering Corporation will be constructing the project with the aim of bridging Nigeria's infrastructure gap, particularly in Nigeria's electricity infrastructure. Caution is warranted as previous foreign development projects in Nigeria have been unsuccessful, and such a highly ambitious projects could face delays and drawbacks. Read more here.
9th BRICS Summit held in China
Earlier this September, Brazil, Russia, India, China, and South Africa met to discuss China's One Belt One Road initiative. They also discussed potentially establishing a BRICS local currency bond, a multilateral payment system, and a credit rating agency.
China looks to investing in Brazil’s infrastructure
The China-Brazil Investment Fund is expected to provide financial support for railway construction linking soybean and maize production areas with ports. However, investors warn China against hasty investment in Brazil without proper research and preparation.
Pakistan feels effects of Chinese development finance
Pakistan's economy is starting to feel the effects of Chinese investment banks four years after the creation of the China-Pakistan Economic Corridor. The corridor has increased Pakistan’s debt to China and has exported important development projects to China, instead of providing construction opportunities domestically. This has lead to a negative opinion of Chinese developmental finance with some in Pakistan.