Chinese Banks to Work in Co-Financing Projects in Pakistan

Chinese Banks to Work in Co-Financing Projects in PakistanAIIB or Asian Infrastructure Investment Bank reported their first co-financing project in Pakistan, although the report is not related to close ties of China and Pakistan. The Chinese led multilateral development bank identified a series of co-financing projects with the Asian Development Bank wherein AIIB president Jin Liqun and ADB president Tekehiko Nakao signed a memorandum of understanding during ADB’s 49th annual board of governors meeting.

First of the projects that is expected to be worked on is the Pakistan M4 highway, which is a 64 kilometer stretch of roadway that will connect Shorkot to Khanewal in Punjab province. The level of finance is said to be at $300 million with both banks contributing equal amounts. The agreements will set the stage of the joint financed projects as both banks are in discussions for co-financing in the roads and water sectors. Questioned if the projects in Pakistan were chosen due a result of close ties between China and Pakistan came about by chance, Pakistan projects were chosen since it was the most mature ones and are part of a series of forthcoming projects that are approved and will be announced in June.

AIIB will be approving $1.2 billion in financing this year, this will cover 12 projects with the World Bank and the ADB along with China’s plans of implementing a $46 billion plan to create a China-Pakistan economic corridor. Aside from the projects in Pakistan, AIIB is planning a road project in Tajikistan and another road project in Kazakhstan. ABD will be the one to lead the Pakistan project while AIIB will be participating later on ADB will administer the project in behalf of the other co-financiers and proper bidding will be carried out in accordance with the procurement guidelines and procedures.

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