Delegations of AIIB met with President Joko Widodo at the Bogor Palace on Monday (12/3). (Photo credit : Special)

JAKARTA (TheInsiderStories) – The Asian Infrastructure Investment Bank (AIIB) plans to extend loans of around US$4 billion in the next two years and Indonesia will get a significant amount of that, AIIB Director Chris Legg said after holding a meeting with the Indonesian President Joko Widodo on Monday (12/03).

“I expect that as it continues to grow, and in the next two years, it probably extends US$4 billion. Indonesia could have a significant share of that,” he said.

In the past two years since its inception, the AIIB has extended US$5.7 billion to its country members — US$2 billion in the first year and US$3.7 billion in the second year.

He said the AIIB so far has supported three projects in Indonesia.

The AIIB team, consists of 12 people representing member countries, paid a courtesy call to President Joko Widodo at the Bogor State Palace, before heading to Jogyakarta and Solo to visit projects financed by the AIIB.

The purpose of the visit is to find out what the Joko Widodo government wants from the AIIB and how can the AIIB works well with the Indonesian government, in particular in supporting the infrastructure projects being developed by the Indonesian government.

When asked about the impact of the political agenda on the AIIB’s loan decision, Legg said the AIIB has no interest in domestic political interest. “It is a normal business for us. The loans will be offered on a project by project, whether the projects are ready to go (or not). The AIIB does not take political issues as considerations in making decisions.”

Finance Minister Sri Mulyani Indrawati said last year that the AIIB has funded several projects in Indonesia, such as slum upgrade, dam operation improvement, and safety project phase 2 with a combined value of US$225 million.

Last year, Indonesia and AIIB worked together in two projects costs US$100 million.

The first project is the development of regional infrastructure covering the provision of clean water and sanitation, flood management, waste management, and the arrangement of slum environment.

The government and the Bank also work for Dam Operational Improvement and Safety Project with total fund $125 million. The project is intended as a long-term government program to develop and improve capability in terms of dam management in Indonesia.

“Dam Operational Improvement and Safety Project is to nurture and rehabilitate previously built dams, not to build new ones,” said Minister of Public Works and People’s Housing, Basuki Hadimuljono, adding the government is currently proposing number of irrigation projects in Indonesia to AIIB.

Indonesia is the eighth largest shareholders with a capital deposit of $672 million to be paid in 5 years. With this contribution, Indonesia has 3.36 per cent out of the entire AIIB’s capital.

China-led AIIB, was set up to help meet the estimated $26 trillion need for infrastructure spending in Asia through 2030. The Bank has pledged to use its investments to help members fulfil their commitments to the Paris climate accord.

AIIB is a new multilateral development bank founded to bring countries together to address the daunting infrastructure needs across Asia and beyond. Headquartered in Beijing, AIIB’s mission is to improve economic and social development in Asia by investing in high quality, financially viable and environmentally friendly infrastructure projects.

The AIIB’s third Annual Meeting will be held in Mumbai, India in June 2018. India is the Bank’s second-largest shareholder and is becoming an increasingly important geography for AIIB investments.

The first AIIB Annual Meeting of the Board of Governors was held in Beijing, China in 2016. The second Annual Meeting of the Board of Governors was held in Jeju, the Republic of Korea in 2017. (*)