China-led AIIB expands loans to Eastern Europe and Latin America... maintains suspension of loans to Russia

$10 Billion Invested Annually Until 2025
Expanding Sales to Africa, Latin America, and Other Regions
Maintaining Suspension of New Contracts with Russia and Belarus

Jin Liqun, President of the Asian Infrastructure Investment Bank (AIIB).

[Asia Economy Reporter Lee Ji-eun] The Asian Infrastructure Investment Bank (AIIB), led by China, has significantly expanded its loan scale targeting countries in Eastern Europe, Latin America, and Africa. As the US-China conflict intensifies, China appears to be accelerating efforts to expand its economic influence over developing countries outside Asia.

On the 27th (local time), Jin Liqun, President of AIIB, stated in an interview with major foreign media that the total fund size, which reached $36 billion (approximately 51.228 trillion KRW) over three years since AIIB's establishment in 2016, will be expanded to allow an annual investment of over $10 billion by the end of 2025.

President Jin said, "AIIB is expanding its operations beyond the Asian region," adding, "Recently, we established our first branch in the Abu Dhabi region of the United Arab Emirates and plan to prepare major projects starting next year."

AIIB intends to expand its operational scope to Sub-Saharan African countries such as Ghana, Nigeria, and Sudan, as well as to Latin America, Eastern Europe, and Central Asia.

Major foreign media outlets predict that although AIIB's total loans to countries outside Asia are currently limited to 15%, the scale of loans available is expected to increase in the future.

However, AIIB has decided to continue withholding the decision to suspend loans to Russia and Belarus, its three major shareholders. In March, AIIB announced in a statement, "As a multilateral international organization established under international treaties, compliance with international law is central to our institution," and declared it would halt new transactions with Russia, which invaded Ukraine.

Russia is one of the key participating countries holding a 6.7% stake in AIIB and received a $500 million loan from AIIB in 2019 for road maintenance projects.

President Jin stated, "Whatever measures are taken, AIIB will not have any negative impact on the international capital market," and added, "AIIB is closely monitoring the (Ukraine war) situation and has not found any signs that would change our current decision."

AIIB was established in 2016 by China to support infrastructure investment in the Asia-Pacific region. Currently, it has 105 member countries including South Korea, India, and the United Kingdom, excluding the United States and Japan. AIIB is regarded as contributing to China's growing influence on the international stage, intertwined with Chinese President Xi Jinping's massive economic initiative, the Belt and Road Initiative.

However, since the outbreak of the COVID-19 pandemic, AIIB has raised a fund of $10 billion and provided over $7 billion in loans by last year, leading to criticism that it is economically subordinating developing countries.

In May, AIIB decided to provide an emergency support of $100 million to Sri Lanka, which declared default, and plans to announce a large-scale support policy for Pakistan, which is suffering severe economic difficulties due to flooding, at the COP27 climate change conference opening on the 6th of next month in Egypt.

This content was produced with the assistance of AI translation services.