The China-backed Asian Infrastructure Investment Bank (AIIB) has agreed to jointly finance a major new highway in Pakistan in its first co-financed project with the Asia Development Bank (ADB).
The 64-kilometre-long stretch of the M4 highway will connect Shorkot to Khanewal in Pakistan’s Punjab province. The two banks announced the project after they signed an agreement to jointly finance projects at an ADB meeting in Germany on May 2.
The bank also had the backing of some of the US allies, including Australia and Britain. Washington has not been supportive of the initiative as the bank is seen as a competitor to the Bretton Woods institutions. The bank is expected to lend $10-15 billion a year for the first five or six years.
“I am delighted to take a further step forward in our partnership with ADB,” AIIB’s President Jin Liqun said in a statement posted on the bank’s website.
“AIIB looks forward to deepening our already strong relationship and expanding our collaboration as we seek to address the significant infrastructure financing needs in the Asia Region,” he added
The project will connect M4 with other highways to connect the cities of Faisalabad and Multan. The M4 project was listed as its first “business opportunity” on AIIB website on April 11. The estimated cost of the project is $273 million. The AIIB stated that the ADB will be the lead co-financer and will administer the project on behalf of the other financing partners.
The AIIB has sought to play down concerns that it will compete with existing Western-dominated multilateral investment banks. A framework agreement to co-finance projects last month was signed between AIIB and the World Bank.
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