Creating COVID-19 Crisis Recovery Facility

1. To help members deal with the economic, financial and public health
pressures arising from COVID-19, they created the COVID-19 Crisis
Recovery Facility (Facility):
- It started operating in April 2020 and will continue to do so until Oct. 16,
2021.
 By then, it will have offered up to USD13 billion in financing to public
and private sector entities in any AIIB member facing, or at risk of
facing, serious adverse impacts as a result of COVID-19.
- As of Dec. 31, 2020, AIIB had approved a total of 27 Facility projects
amounting to USD7.07 billion to help 19 members navigate the challenges
of these highly uncertain times.

2. The objective is to achieve balance between members, considering the

indicative size of Facility financing requests, members’ needs, and quality of
financing requests and other available financing resources. Consideration
has been given to the overall size of the Facility and to complementarity,
including member limits of other multilateral development banks.

3. The Facility was designed to support the needs of members in the following
areas:
https://www.aiib.org/en/news-events/annual-report/2020/covid-19/index.htm
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- Public health 
- Intermediary financings to alleviate liquidity constraints 
- Financings to strengthen economic resilience and to support policy 

 These are the projects that AIIB has implemented so far with a view to
tackling or handling its members’ financial predicament (particularly in
Asian countries) during the pandemic.

Public Health
1. As of Dec. 31, 2020, they had approved eight public health projects under
the COVID-19 Crisis Recovery Facility in eight members—Bangladesh,
China, Georgia, India, Indonesia, the Maldives, Turkey and Uzbekistan
—for a total approved financing (loans and investments) of USD1.50 billion.
 2. Projects under this category supported emergency public health responses,
including developing the capacity of the health system, providing essential
medical equipment and supplies to combat COVID-19 and assisting the
long-term sustainable development of the health sector.
Countries Amount provided Purpose
- To upgrade their public health infrastructure,
China USD355 million
system and emergency response.
- To ensure that designated COVID-19 referral
hospitals were fully equipped.
Indonesia USD250 million - Helped strengthen the laboratory network
and surveillance system to augment testing
and contact tracing.
- To deliver a combination of emergency
India USD500 million
response and health system capacity building.
- To implement the national emergency
Georgia USD100 million
COVID-19 response.
- To procure essential protective equipment
Maldives USD7.3 million and other essential items => protect healthcare
workers and patients
- To upgrade national laboratories, develop
Uzbekistan USD100 million surveillance systems and build case
management capacity.
- To help the government ramp up its testing,
Bangladesh USD100 million tracing and treatment capacity and improve the
longer-term pandemic preparedness.
- To supply hospitals with critical hospital
Turkey USD82.6 million
equipment.

Intermediary Financings to Alleviate Liquidity Constraints

1. As of Dec. 31, 2020, they had approved seven intermediary financings to
alleviate liquidity constraints under the COVID-19 Crisis Recovery Facility
in six members—two in Turkey and one each in Ecuador, the Kyrgyz
Republic, Russia, Uzbekistan and Viet Nam—for a total approved
financing (loans and investments) of USD1.30 billion.
2. Projects under this category supported key infrastructure companies and
micro, small and medium-sized enterprises (MSMEs), which are essential to
the economy and are struggling to survive.
 AIIB worked with local banks and financing institutions by extending credit
lines and loans to enable them to on-lend the proceeds to their clients,
including MSMEs.
Supporting MSMEs  AIIB supported infrastructure companies => they
could continue to provide critical infrastructure services. (They also
supported key industrial segments that have been hit by COVID-19. In some
members, the segments supported were tourism and services, in others
agriculture, manufacturing or exports).

Countries Amount provided Purpose

- Allowed two of Turkey’s development
banks => on-lend the proceeds to
infrastructure-related companies, mid-
capitalization firms and small and medium-
sized enterprises (SMEs) serving the
- USD500 million transport, energy, water, sustainable cities
Turkey
- USD100 million (including health care), information and
communication technology and other
productive sectors.
- To support its clients’ working capital
shortages and relieve liquidity pressures
caused by the pandemic.
- To expand its working capital and continue
Viet Nam USD100 million its trade-related lending program to private
sector enterprises.
- The loan enabled small businesses =>
Kyrgyz Republic USD50 million continue paying their rent, utilities, payroll
and suppliers; operate during the pandemic
- To bolster its efforts to preserve jobs and
Russia USD300 million working conditions and ensure continuous
operations.
- To support SMEs operating in
Uzbekistan USD200 million
infrastructure and other productive sectors.
- To loosen liquidity constraints facing
Ecuador USD50 million
MSMEs.

Economic Resilience
1. As of Dec. 31, 2020, we had approved 12 economic resilience projects under
the COVID-19 Crisis Recovery Facility in 11 members—two in Pakistan
and one each in Bangladesh, Cambodia, Cook Islands, Fiji, Georgia,
India, Indonesia, Kazakhstan, Mongolia and the Philippines—for a total
approved financing (loans and investments) of USD4.28 billion.

2. The AIIB assistance to the 11 members went to programs  promote social

protection and economic resilience => prevent long-term damage to
productive capacity (including human capital), => help members pursue
economic recovery and provide social safety nets for vulnerable groups.

Countries Amount provided Purpose

- To bolster economic aid for businesses,
Indonesia USD750 million support poor and vulnerable households and
strengthen health-care systems.
- To support the government’s fiscal
countercyclical expenditure programs =>
Bangladesh USD250 million strengthen health-care services, provide direct
support for the poor and vulnerable groups
and help businesses protect jobs.
The Philippines USD750 million - To help increase testing capacity.
- To help the government implement COVID-
19 response and health system measures,
provide social assistance to vulnerable groups
India USD750 million
and provide stronger social safety measures
for affected workers in organized and
informal sectors.
- To help the government implement its
Mongolia USD100 million Countercyclical Development Expenditure
Program
- To cover the government’s immediate
COVID-19 health policy response, social
Kazakhstan USD750 million
protection and employment recovery
measures and economic stimulus measures.
Georgia USD50 million - To help the government cover an
unanticipated financing gap that arose
because of the impact of COVID-19 and to
sustain the momentum of the Economic
 Management and Competitiveness Program
reform effort.
- Aimed at assisting women, children and
jobless returning migrants in rural areas.
- Programs include infrastructure work =>
Cambodia USD60 million
sustain rural livelihood and trade flows, cash-
for-work programs and water sanitation and
hygiene preparedness programs
- To provide social and economic assistance
to mitigate economic disruption and support
Cooks Island & USD20 million & economic resilience.
Fiji USD50 million - To support the government’s efforts to assist
the formal sector, including SMEs and their
employees, and informal workers.
- To provide general budgetary support => fill
gaps in the government’s development
financing in support of health, social safety
net and economic stimulus measures.
- USD500 million
Pakistan - To deliver social protection for the poor and
- USD250 million
vulnerable, an expanded health sector
response to the pandemic and a pro-poor
fiscal stimulus package => ensure recovery in
growth and employment.

The AIIB’s Projects in Vietnam

1. VP Bank COVID-19 Response Facility
- Description: AIIB’s first project in Viet Nam would help VP Bank expand
lending to the private sector—including small and medium enterprises—to help
sustain business activities disrupted by the COVID-19 pandemic.
 A USD100-million loan from AIIB’s COVID-19 Crisis Recovery Facility was
quickly arranged to bolster VPBank’s working capital and further develop trade-
related programs lending to local enterprises.
- Despite the initial negative impact of the COVID-19 outbreak, VP Bank recorded
a 51.6% jump to 5.2 trillion dong ($224.7 million) in net profit in the first half of
2020 from a year ago. Its full-year pretax profit target in 2020 is 10 trillion dong,
down just 1% from the previous year.
 VPBank can widen its program for supply chain financing for coffee exporters,
which, in turn, could help save coffee farmers’ livelihoods and help coffee-
producing SMEs keep running.

2. Dakdrinh 125MW Hydropower Plant

- Description: the project aims to mobilize private capital for the restructuring or
refinancing of the existing debt of the 125MW Dakdrinh Hydropower Plant in
Central Viet Nam. 
- The hydropower plant had a total project cost of USD 280 million in 2011 and
was "partially funded by a USD 178 million loan with cover from an export credit
agency, and a guarantee by the Government of Viet nam (GoV)."  In terms of the
new proposed financing, it "involves an AIIB A/B loan of up to USD95 million,
with an A Loan facility for AIIB's own account in the amount of USD47.5million
million and B-loan participation of USD47.5 million from commercial bank(s)."
- According to an AIIB project summary, the refinancing is in the form of a non-
sovereign senior secured loan. This involves removal of the sovereign guarantee
from the government and insurance cover in support of the existing debt financing.
The idea is to mobilize private capital to restructure the plant’s existing debt.

 While China likes to present this initiative as a “win-win” situation for Asia,
there are concerns that the new bank may cut corners on environmental,
social, and anticorruption standards. It is, in fact, anticipated that loans will
be made at commercial rates with few or no non-economic conditionalities
such as environmental protections. Moreover, AIIB will differ from an
organization like the Asian Development Bank by focusing on building
infrastructure rather than prioritizing poverty reduction. There is also a risk
of misallocation of funds to support mega-projects that have little impact on
poverty or inclusive economic growth. Finally, the task of leading a
complex, multilateral organization spanning an array of national interests
will not be easy.
In Vietnam, Domestic capital sources, although being extremely active, are unable to meet the demand,
requiring the mobilization of international capital sources.

because Vietnam has become a middle-income nation, the World Bank and ADB norms state that
preferential capital for Vietnam would be progressively constrained in the future.

As a result, by becoming a stakeholder in AIIB, Vietnam will get access to a valuable source of capital
for the country's infrastructure.

In addition, as a pioneering shareholder of AIIB, Vietnam has additional benefits, including the
opportunity to participate in the bank's planning and policy development from the start and throughout
its operation.

Therefore, joining the AIIB provides Vietnam with significant prospects to advance its role and
position in the near future.