The China-led Asian Infrastructure Investment Bank (AIIB) will commit half a billion dollars to bonds that will fund sustainable energy and transportation programs, the Wall Street Journal reports.
The restrained move is a small fraction of the $100 billion the bank attracted when it launched in 2016, which it has applied minimally despite the number of members continuing to expand to almost 100 countries.
The new bond program – named the ‘AIIB Asia ESG Enhanced Credit Managed Portfolio – will incentivise infrastructure firms in the private-sector to pursue clean and sustainable projects, according to Chief Investment Officer D. J. Pandian, through buying up $500 million of corporate debt allocated to such deals.
“We are investing in these bonds so there will be more liquidity and encourage more infrastructure projects to come to the capital market,” said Pandian.
Up to 15% of the bond investment will be directed towards China, Pandian said, where the government is eagerly working to become a global leader in clean energy policies and green finance.