Multicountry: Guarantee Facility of International Bank for Reconstruction and Development Loans

OBJECTIVE

To improve AIIB’s balance sheet structure and provide greater lending capacity to both AIIB and IBRD.

DESCRIPTION

The proposed Project responds to a recommendation made in November 2022 by the G20 Capital Adequacy Frameworks (CAF) working group for multilateral development banks (MDBs) to expand the use of financial innovation to provide additional lending headroom.

This Project would enable the Asian Infrastructure Investment Bank (AIIB) to deploy some of its capital surplus to provide a Guarantee facility to the International Bank for Reconstruction and Development (IBRD), thereby diversifying AIIB’s sovereign-backed lending exposure and enhancing AIIB’s lending capacity to members with lower credit ratings, as well as alleviating existing constraints on IBRD’s capital adequacy limits on providing financing.

This Project will comprise a series of Guarantees in the maximum aggregate amount of one billion USD covering IBRD loans previously approved to various members of AIIB.