Asian Infrastructure Investment Bank

Founded:

2015

Mission:

"To improve social and economic outcomes in Asia."

Total assets:

$27 billion

Headquarters:

Beijing, China

Top five shareholders:

China, India, Russia, Germany, South Korea and Australia.

This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.

Metric	Summary
Promotion of green finance	Paris aligned: Despite being the “youngest” institution in the Joint MDB Group, the AIIB has quickly established itself as a key green finance actor in Asia, while pursuing its fundamental mission to fund green infrastructure. The Bank has sought to develop innovative financial instruments to provide clients with access to local currency financing and enhance the availability of infrastructure finance. This has been complemented with efforts to build capacity among regional investors to identify Paris aligned investment opportunities and the issuance of both climate adaptation and sustainable development bonds (notably in lieu of certified green bonds). Going forward, there is scope for the AIIB to play a transformational role in promoting industry best practice in private sector transition planning, strengthening its guidance for identifying Paris aligned investment opportunities, and supporting the growth of the regional green bond market.
Fossil to non-fossil energy finance ratio and scaling up climate finance	Some progress: Between 2019 and 2022, for every USD 1 the AIIB provided to fossil fuels, USD 3.2 went to clean energy, USD 2.1 to transmission and distribution (which typically cannot be attributed to any specific energy type) and USD 1.6 to other energy projects (e.g. biomass, nuclear or mixed energy). This reflects middle-of-the-pack performance among peer institutions covered by E3G’s Public Bank Climate Tracker Matrix. In terms of climate finance, the AIIB has set a target for 50% of annual approvals to be climate finance by 2025. By its own reporting, the Bank already exceeded this target in 2022 (at 56%). However, this accounting does not include the Bank’s Covid-19 Crisis Recovery Facility. As a result, Joint MDB reporting conversely suggests climate finance as a proportion of total AIIB approvals has fluctuated in recent years, most recently reaching 29% in 2023.
Nature based solutions	Some progress: The AIIB has made some progress in promoting nature based solutions, acknowledging their potential in its Climate Action Plan and launching reports on “Nature as Infrastructure” and “Investing in Nature as Infrastructure – The Opportunity”. However, the Bank lacks specific targets for biodiversity protection, net zero deforestation, and peatland restoration. While the AIIB has exclusion lists for certain harmful activities, its policies on forest conversion and agricultural standards remain limited, indicating room for improvement to fully align with Paris Agreement goals.
Climate risk, resilience, and adaptation	Some progress: The AIIB has made some progress in climate risk management by introducing its Paris Alignment Assessment (PAA) Methodology, which includes project level physical climate risk assessments and vulnerability analyses. While the Bank does incorporate transition risk into its PAA methodology, there is scope to strengthen its consideration across the Bank’s climate risk processes and sectors of operation. The AIIB lags behind peers on adaptation finance, providing only 18% of its total climate finance for adaptation in 2022. While the AIIB has tools to enhance client resilience, such as the Aware for Projects screening tool, there is room for greater public transparency regarding these. Moreover, the Bank has yet to establish any target(s) for increasing adaptation and resilience financing, in line with the joint MDB commitment to double adaptation finance by 2025.
Overarching climate strategy	Some progress: The AIIB has made some progress on integrating climate change at the strategic level. The Bank has notably developed its own Paris Alignment Methodology, based on the joint MDB methodological framework. Its Corporate Strategy 2021–2030 and first Climate Action Plan (CAP) set a goal for 50% of the Bank’s operations to be climate finance by 2025 and acknowledge Asia’s role in climate change. However, both strategies lack concrete, distinct targets for mitigation and adaptation, as well as any reference to forward-looking commitments anchored in a clear temperature roadmap aligned with the goals of the Paris Agreement. Moreover, the principle of “do no harm” is notably absent.
Integration of climate mitigation and resilience in key sectoral strategies	Some progress: The AIIB’s sectoral strategies show varying degrees of climate integration. The Energy Sector Strategy demonstrates the most progress in addressing Paris Agreement goals, while other sectors like transport lag behind. The Bank’s approach across sectors is characterised by a recognition of climate challenges, but often lacks specific, time-bound commitments and detailed implementation plans that will support alignment of the Bank’s activities with the temperature goals of the Paris Agreement in practice. Inconsistent integration of climate considerations across sectoral strategies may result in missed opportunities to promote climate resilience and mitigation in its infrastructure investments.
Institutional leadership	Some progress: The AIIB has significantly enhanced its efforts to establish institutional leadership in recent years, establishing a network of partnerships that includes institutions such as the Food and Agriculture Organization (FAO) and Global Centre on Adaptation (GCA). It has positioned itself to catalyse collaboration within the PDB ecosystem by supporting joint MDB initiatives, and co-hosting Finance in Common (FiCS) 2025. Additionally, the AIIB has taken strides toward establishing itself as a thought leader, demonstrated by the Asian Infrastructure Finance (AIF) Reports, and in mobilising private finance for green infrastructure, such as through innovative initiatives like the Bayfront Infrastructure Venture and the AIIB-Amundi Climate Change Investment Framework. Despite these outward-facing efforts, the degree to which such leadership is reflected in Bank policies is mixed. The AIIB has fallen behind peer institutions in key aspects of MDB reform, including on the efficient use of capital and transforming country engagement. Moreover, important elements of institutional climate mainstreaming should be strengthened in line with best practice, before the Bank can be considered a Paris aligned institutional leader.
Energy access and fuel poverty	Some progress: While the AIIB acknowledges the importance of energy access and includes it as a guiding principle in its Energy Sector Strategy, it falls short of best practice in implementing this strategic priority. Specifically, the Bank has not adopted any clear minimum working definition of access across its operations or committed to any specific energy access target (beyond a general commitment to SDG7). Moreover, despite indications that the Bank intends to consider energy access within its Results Monitoring Framework, there is no publicly available update on this reporting to enable portfolio level tracking of progress.
Energy efficiency strategy, standards and investment	Some progress: The AIIB recognises the importance of energy efficiency in its strategies but lacks concrete plans for prioritising it across operations or mandating specific standards for projects and financial intermediaries. While the Bank acknowledges principles like “Avoid–Shift–Improve” in transport and the importance of green building technology in its Climate Action Plan, it provides limited guidance on implementation. As a result, the AIIB’s approach to energy efficiency appears to be general and lacking in specific, actionable commitments across sectors.
Fossil fuel exclusion policies	Some progress: The AIIB has formally committed to not financing coal-related projects and supports international coal phase-out efforts. While the Bank will only support oil sector investments under “exceptional circumstances”, the wording of the Energy Sector Strategy leaves some room for financing up-, mid-, and downstream projects under certain criteria. The AIIB excludes upstream investments in natural gas (specifically exploration and drilling). The Energy Sector Strategy identifies gas as a transition fuel in some circumstances (and subject to evolving commitments under the Paris Agreement), signalling continued support for mid- and downstream operations in line with a comprehensive set of criteria set out by the Energy Sector Strategy. These include consideration of national climate commitments and decarbonisation trajectories, carbon lock-in and stranded asset risk, and renewable alternatives. The strategy lacks any dedicated safeguards or policies regulating supply-side energy efficiency investments, but the Bank’s Paris Alignment Assessment (PAA) methodology ensures stranded asset and carbon lock-in risks are considered for all projects.
Greenhouse gas accounting and reduction	Some progress: The AIIB is implementing a phased approach to GHG accounting, having started with energy sector projects in 2016. While it has extended this practice to projects in other sectors on a case-by-case basis, there have been no explicit indications or updates regarding progress or plans to formally expand this approach to other sectors. Moreover, the project level accounting procedures set out by the Bank’s Environmental and Social Framework fall short of constituting a robust, consistent approach, being significantly underdeveloped in comparison with the practice of peer institutions. At the portfolio level, the AIIB has shifted from reporting gross emissions to emissions avoidance/reduction, and likewise only based on project level accounting for energy sector operations. There is no evidence that the Bank has any specific GHG emissions targets in place. However, the AIIB is aiming to be a first-mover among MDBs in publishing its first International Sustainably Standards Board (ISSB) report in 2025, which should include portfolio emissions reporting.
Shadow carbon pricing	Some progress: Both the Energy Sector Strategy and Paris alignment methodology of the AIIB state that shadow carbon pricing will be used as part of the economic assessment of prospective projects. As per information received from the AIIB, the Bank requires an economic analysis utilising a shadow carbon price to be conducted for all sovereign-backed financing, as well as all non-sovereign backed financing “with large climate externalities”. Price levels used are in line with the High-Level Commission on Carbon Prices (HLCCP). However, neither of the above documents provides clear details regarding how the shadow cost of carbon informs investment decisions in practice, and whether it is applied across multiple reference scenarios. Moreover, the robustness of its usage is severely constrained by the Bank’s nascent project level GHG accounting procedures.
Country level work	Unaligned: While the AIIB has been moving towards more systematic country engagement through multi-year rolling pipelines, the Bank does not have any dedicated country strategies or equivalent engagement frameworks in place across its member countries. The Bank has stated it will review any project that is aligned with its thematic priorities and will bring clear benefits to Asia. That being said, dedicated country strategies can still provide significant value in orienting the Bank’s engagement at the country level to ensure that synergies across projects, and with member countries’ climate and development goals, are maximised. Given the AIIB’s important role in the region and interest in ensuring strong enabling environments for green and resilient investment, there is a clear case for the Bank to enhance its country engagement and capacity building efforts, building on existing initiatives.
Technical assistance for implementing Paris goals	Unaligned: Since its inception, the AIIB has predominantly focused on project-based financing. The Bank’s business model has involved carefully considering the offers of peer institutions (and the needs of its clients), to identify where it should focus its efforts to add value. Accordingly, the AIIB’s 2023 Climate Action Plan makes reference to supporting the development and adoption of climate-positive policies, including through policy-based financing instruments. In this vein, the Bank notably established aClimate-Focused Policy-Based Financing (CPBF)offering in 2024. The AIIB is also directly involved with the jointMDBs’ Long-Term Strategies Program (LTS-P). However, there remains significant scope for the Bank to scale up its efforts in this space, in line with its business model. There is no publicly available evidence of dedicated initiatives that target NDC implementation or support raising ambition. Moreover, the AIIB’s wider climate-related technical assistance offering is relatively limited. This is particularly notable for areas where the Bank could potentially provide significant technical support given its infrastructure focus, such as for fossil fuel subsidy reform.
Transparency of climate finance data	Some progress: Although the AIIB reports aggregate climate finance figures as part of the Joint Report on MDB Climate Finance (and its own Annual Reports), its project level climate finance disclosures are typically in an inaccessible, and not machine-readable, format. This, among other factors, has resulted in the 2023 DFI Transparency Index ranking the AIIB 6^th (of 9 assessed institutions) for its sovereign operations, and 9^th (of 21 institutions) for non-sovereign operations in terms of overall portfolio transparency. The Bank’s financial intermediary lending disclosure practices are especially weak. These do not allow sufficient verification of the alignment of subprojects with climate goals, nor do they appear to provide a mechanism or recourse process in the event of FIs’ failure to comply with the Bank’s safeguard and disclosure standards.