The Beijing-based Asian Infrastructure Investment Bank is in talks to provide a second loan guarantee deal to the World Bank, a move that would deepen the lenders’ partnership and allow the Washington-based institution to increase lending.The talks follow a similar deal last year, when the AIIB agreed to issue $1bn in credit guarantees against sovereign-backed loans made by the International Bank for Reconstruction and Development, the World Bank’s lending arm. That deal was intended to enable the IBRD to squeeze more out of its cash-constrained balance sheet.
The increasing co-operation comes as the World Bank and other multilateral development banks are being urged to overcome tight capital constraints and mobilise financial resources to help countries deal with challenges such as climate change.
The AIIB is also in discussions with the Asian Development Bank and Inter-American Development Bank about similar projects, AIIB president Jin Liqun told the Financial Times.