On Wednesday, the Asian Infrastructure Investment Bank (AIIB) was urged by Malaysia to implement an inclusive financing mechanism tailored to the specific needs of developing countries. The proposal was made by Deputy Finance Minister I, Datuk Seri Ahmad Maslan, during the Governors’ Business Roundtable held on September 25, as part of AIIB's annual meeting in Sharm El-Sheikh, Egypt.
Maslan encouraged the AIIB to explore alternative financing options such as grants and blended financing mechanisms. These alternatives are in line with Islamic finance’s principles of equitable risk sharing. According to a statement from the Malaysian Finance Ministry, these efforts would expedite the transition of developing countries towards a low-carbon economy.
In addition, the ministry noted that communities affected by climate change would benefit from adaptation strategies that can mitigate climate risks and hazards such as floods, landslides, or typhoons. The AIIB meeting, held on September 25-26, marked the first event organized on the African continent and the first physical gathering post-COVID-19 pandemic.
On the same day, a Contribution Agreement worth $10 million was signed between AIIB and the Saudi Fund for Development (SFD). The agreement aims to support AIIB's Special Fund Window for Less Developed Members, bridging the financial gap for infrastructure projects and other vital sectors in less-developed countries. The signing took place on the sidelines of the Eighth Annual Meeting of the Board of Governors of the AIIB.
The contribution is expected to deliver significant developmental benefits for Asia's future and contribute to long-term regional prosperity. The SFD has a history of funding development projects; since its establishment in 1975, it has supported over 700 development projects worth $18.7 billion in more than 90 countries worldwide.
AIIB comprises 107 member countries and operates as a multilateral development bank. Its mission is to support sustainable economic development and promote regional cooperation in addressing development issues and challenges of member countries. Malaysia became a member of the AIIB in 2016.
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