Presentation: Draft AIIB Water Strategy - Fifth Roundtable on Financing Water - Mr. David Ginting

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Draft AIIB Water
Strategy
David Ginting, Investment Operations Specialist – Water,
Asian Infrastructure Investment Bank, david.ginting@aiib.org

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Overview of AIIB Water Investments
• AIIB opened for business in January 2016 and positioned ‘Water’ as one if its core sectors
(together with Energy, Transport, Urban and Digital Infrastructure);
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59%17%
15%
9%
BY SUB-SECTOR
WATER SUPPLY AND SANITATION
IRRIGATION
FLOOD MANAGEMENT
WATER RESOURCES MANAGEMENT
41%
38%
21%
BY REGION
SOUTHEAST ASIA
SOUTH ASIA
MIDDLE EAST
• First water project
approved in Mar 2017
• Per Oct 31, 2019,
AIIB has approved seven
projects in six countries
• Total = USD 1.42 billion
(14% of total financing)

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AIIB and the Asian water sector
• Pipeline per Oct 31, 2019 = USD 1.62 billion; expanded operation to the Central Asia
• Growing operations call for an investment strategy aimed to:
1. articulate the role to play in helping members address water challenges
2. provide key principles for the selection and prioritization of investments; and
3. establish guidance for developing capacity and business;
• Strategy’s development was launched on April 2019 through a workshop in Beijing,
followed by a technical analysis on the Asian water sector;
• First draft has been disclosed for public consultation from mid Oct 2019 (AIIB Website);
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AIIB Draft Water Strategy

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Vision: contributing to global agenda of ensuring the availability and
sustainable management of water and sanitation for all (SDG-6)
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• Positive impact on sustainability and maximize environmental and social
outcomes in line with SDG6
• Client-driven and integration of projects in to their development plan
• Focus on financial sustainability of assets and operations
Promote
sustainable
infrastructure
• Holistic approach by promoting integrated water resource management
• Investments are carried out in a manner that helps build connection,
coordination and collaboration amongst stakeholders
Integrated resource
management
• Addressing the financing gap, in sector dominated by public financing
• Harnessing of private sector innovation, management and optimization
efficiencies together with increasing the flow of private funds
Mobilizing private
capital &
efficiencies
• Use of technology to improve efficiencies in management, governance and
service delivery – reduce cost and strengthen resilience
• Important catalytic role to promote adoption and dissemination of
technology
Adoption of
technology

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AIIB categorization of investment areas underpins its
vision and principles
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AIIB’s investment areas in the water sector
Water Services
• Improved efficiency of water
services (water supply and
sanitation, irrigation and drainage);
• Better access to quality water
• Expand access to water services
• Harness water’s productive
potential in energy and transport
• Rehabilitation, upgrading and
improved safety of existing water
infrastructure
Resource Management
• Improve water quality
• Reduce water pollution,
• Enhance efficiency of water use and
allocation
• Water reuse and recycle
• Integrate nature-based solutions
• River and lake restoration
• Augment water supplies and
storage
• Water conservation
Resilience
• Reduce losses from floods,
droughts, freshwater variability and
other related disasters through
physical interventions
• Institutional and system
improvements (including better
hydrological monitoring, disaster
warning & contingency planning)
Private Sector Mobilization & Adoption of Technology

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Approach (1)
• Not feasible at this stage to limit range of financing activities- need to be responsive
to Member needs and requests while being realistic about Bank’s capabilities;
• The Bank limits its activities based on (1) Bank’s capacity, (2) project implementation
readiness and (3) degree of institutional reform needed;
• Financing of innovative technology is a cross cutting measure, to be implemented
with Digital Infrastructure Strategies and Sustainable Cities Strategy
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- Focused on investment-ready
projects with well-demonstrated
institutional and implementation
capacity of client;
- Co-financing where institutional
reform needs are greater;
- Example of investments: upgrade,
expansion, rehabilitation of existing
infrastructure with track record of
successful operations
- Explore and deepen partnerships
(through co-financing and knowledge
partnership) to address policy and
regulatory challenges in projects; and
to build bank’s capacity and establish
its position in policy dialogues;
- Build reputation and business by
strengthening in-house capacity and
active client and partner relationship
- Gradually undertake more complex
projects (technical, financial and
institutional) and actively contribute to
policy dialogues and institutional
reforms; to gain favorable position in
shaping the envisaged financing;
- Position itself as a catalyst for private
financing and adoption of innovations
in technologies and green solutions.
Approach (2): evolution of engagement in the sector
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Partnership building
Standalone, co-financing, private
capital mobilization
Financing
Standalone and Co-financing
Support Policy Dialogue
Support policy dialogues to influence
project inception
Standalone, co-financing, private
capital mobilization
Short-term Long-term
Degreeofinstitutional
complexity
Medium-term

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Thank You
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policies/public-consultation-draft-water-sector-strategy/index.html