ABSTRACT
This chapter focuses on the financial and functional aspects of the Asian Infrastructure Investment Bank (AIIB). It addresses the viability of infrastructure investment, and discusses other multilateral institutions and public–private partnerships (PPPs). Infrastructure investment faces challenges in terms of appropriate functional and financial design. This is because the projects are complex and may require participation of many parties. Infrastructure projects pass through several stages, including the planning, construction and operational stages. PPPs dominate cross-border investment in Asia, and can be structured in different ways, with various levels of involvement of private party financially and operationally. The Asian Development Bank (ADB) and World Bank also engage in PPPs and have expanded the scope of PPP cooperation in recent years. The AIIB became operational in January 2016, during a time of slowing global growth, with capital of $100 billion. The AIIB aims to improve large infrastructure gap in Asia. The ADB estimates that there is an annual financing shortfall of $800 billion.
