SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 18-K/A

 

 

For Foreign Governments and Political Subdivisions Thereof

AMENDMENT NO. 4

to

ANNUAL REPORT

of

ASIAN INFRASTRUCTURE INVESTMENT BANK

(Name of Registrant)

 

 

Date of end of last fiscal year: December 31, 2022

 

 

SECURITIES REGISTERED*

(As of the close of the fiscal year)

 

 

 

Title of Issue		Amount as to Which Registration is Effective		Names of Exchanges on Which Registered
N/A		N/A		N/A

Name and address of person authorized to receive notices

and communications from the Securities and Exchange Commission:

KRYSTIAN CZERNIECKI

Sullivan & Cromwell LLP

Neue Mainzer Strasse 52

60311 Frankfurt am Main, Germany

 

 

 

*	The registrant files annual reports on Form 18-K on a voluntary basis.

 

 

 

TABLE OF CONTENTS

 

EXPLANATORY NOTE			i
SIGNATURE			ii
EXHIBIT INDEX			iii
EXHIBIT 12 — ASIAN INFRASTRUCTURE INVESTMENT BANK’S FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023
EXHIBIT 13 — ASIAN INFRASTRUCTURE INVESTMENT BANK, CONDENSED FINANCIAL STATEMENTS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023

EXPLANATORY NOTE

This Amendment No. 4 to the annual report on Form 18-K for the fiscal year ended December 31, 2022 (the “Annual Report”) is filed by the Asian Infrastructure Investment Bank (“AIIB”), a multilateral development bank established and operating under the Articles of Agreement, an international treaty to which governments are parties and which was open for signature on June 29, 2015 and entered into force on December 25, 2015, with a mandate to (i) foster sustainable economic development, create wealth and improve infrastructure connectivity in Asia by investing in infrastructure and other productive sectors and (ii) promote regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions. This amendment to the Annual Report, including any future amendments, is intended to be incorporated by reference into any future prospectus filed by AIIB with the Securities and Exchange Commission to the extent such prospectus indicates that it intends this report to be incorporated by reference.

The Annual Report is hereby amended as follows:

1. Exhibit 12 hereto, entitled “Asian Infrastructure Investment Bank’s Financial Condition and Results of Operations as of and for the Nine Months Ended September 30, 2023,” is added to the Annual Report; and

2. Exhibit 13 hereto, entitled “Asian Infrastructure Investment Bank, Condensed Financial Statements (Unaudited) for the Nine Months Ended September 30, 2023,” is added to the Annual Report.

 

i

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, at Beijing, People’s Republic of China, on the 24th day of November, 2023.

 

 

ii

EXHIBIT INDEX

 

Exhibit Number		Description
12.		Asian Infrastructure Investment Bank’s Financial Condition and Results of Operations as of and for the Nine Months Ended September 30, 2023
13.		Asian Infrastructure Investment Bank, Condensed Financial Statements (Unaudited) for the Nine Months Ended September 30, 2023

 

iii

Exhibit 12

Asian Infrastructure Investment Bank’s Financial Condition and Results of Operations as of and for the

Nine Months Ended September 30, 2023

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Amounts in tables in this Exhibit 12 to this annual report on Form 18-K may not sum exactly due to rounding differences.

CAPITALIZATION AND INDEBTEDNESS

The following table sets forth the capitalization and indebtedness of the Asian Infrastructure and Investment Bank (“AIIB” or the “Bank”) as of December 31, 2022 and does not give effect to any transaction since December 31, 2022. Since December 31, 2022 and through September 30, 2023, there have been no material changes to the capitalization and indebtedness of the Bank, except for (i) the issuance by the Bank of (a) US$2,000 million principal amount of 4.875% notes due 2026; (b) US$2,000 million principal amount of 4.000% notes due 2028; (c) US$4,961.0 million equivalent of fixed rate and zero coupon notes and US$50.0 million of floating rate notes under AIIB’s Global Medium Term Note Programme; (d) US$1,761.8 million equivalent of zero coupon notes under AIIB’s Euro-Commercial Paper Programme; (e) US$566.4 million equivalent of fixed rate notes under its Renminbi Bonds Issuance Programme; and (f) US$338.4 million equivalent of fixed rate notes under AIIB’s A$ and NZ$ Debt Issuance Programme; (ii) the repayment of (a) US$3,000 million principal amount of 0.250% notes due 2023 issued in 2020; (b) US$1,391.9 million principal amount of fixed rate and zero coupon notes issued under AIIB’s Global Medium Term Notes Programme; (c) US$1,347.8 million equivalent of zero coupon notes issued under AIIB’s Euro-Commercial Paper Programme; (d) US$424.6 million equivalent of fixed rate notes issued under the Bank’s Renmibi Bonds Issuance Programme; (e) US$364.0 million equivalent of fixed rate notes issued under AIIB’s A$ and NZ$ Debt Issuance Programme; and (iii) an increase of US$708.5 million in retained earnings.

 

		As of December 31, 2022
		(in thousands of US$)
Borrowings			24,475,728
Members’ equity
Paid-in capital			19,392,900
Reserves for accretion of paid-in capital receivables			(2,268	)
Reserves for unrealized loss on fair valued borrowings arising from changes in own credit risk			9,548
Retained earnings			1,065,545
Total members’ equity			20,465,725

SELECTED FINANCIAL INFORMATION

The financial information included herein for the nine-month periods ended September 30, 2023 and September 30, 2022 and as of September 30, 2023 and December 31, 2022 is derived from the unaudited interim condensed financial statements as of and for the nine months ended September 30, 2023, including the notes thereto (the “Interim Financial Statements”), of the Bank. The Interim Financial Statements have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting.” The financial condition and results of operations as of and for the nine-month period ended September 30, 2023 are not necessarily indicative of results to be expected for the full year 2023.

The selected financial information should be read in conjunction with the Interim Financial Statements in Exhibit 13 of this annual report on Form 18-K and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Exhibit 12 of this annual report on Form 18-K.

 

		Nine Months Ended September 30,
		2023				2022
		(unaudited)				(unaudited)
		(in thousands of US$)
Selected Profit and Loss Information
Interest income			1,381,793				371,340
Interest expense			(563,915	)			(200,690	)
Net interest income			817,878				170,650
Net fee and commission income			24,760				26,481
Net gain on financial instruments measured at fair value through profit or loss			187,068				155,355
Net loss on financial instruments measured at amortized cost			(4,406	)			(13,172	)
Share of gain on investment in associate			3,313				573
Impairment provision			(13,732	)			(158,673	)

 

1

		Nine Months Ended September 30,
		2023				2022
		(unaudited)				(unaudited)
		(in thousands of US$)
General and administrative expenses			(164,222	)			(131,948	)
Net foreign exchange loss			(142,181	)			(97,439	)
Operating profit/(loss) for the period			708,478				(48,173	)
Accretion of paid-in capital receivables			1,015				1,866
Net profit/(loss) for the period			709,493				(46,307	)
Other comprehensive income
- Items will not be reclassified to profit or loss
Unrealized (loss)/gain on fair-valued borrowings arising from changes in own credit risk			(99,229	)			82,321
Total comprehensive income			610,264				36,014

 

		As of September 30,				As of December 31,
		2023				2022
		(unaudited)				(audited)
		(in thousands of US$)
Selected Balance Sheet Information
Total assets			53,048,585				47,409,248
Total liabilities			31,962,096				26,943,523
Total members’ equity			21,086,489				20,465,725
Total liabilities and members’ equity			53,048,585				47,409,248

 

2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Interim Financial Statements in Exhibit 13 of this annual report on Form 18-K.

Overview

AIIB is a multilateral development bank (“MDB”) with a mandate to (i) foster sustainable economic development, create wealth and improve infrastructure connectivity in Asia by investing in infrastructure and other productive sectors and (ii) promote regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions. The Bank commenced operations on January 16, 2016 to help its members meet a substantial financing gap between the demand for infrastructure in Asia and available financial resources. The Bank aims to work with public and private sector partners to channel its own public resources, together with private and institutional funds, into sustainable infrastructure investment. The Bank maintains its principal office in Beijing, People’s Republic of China (“China”) and has an additional office in Abu Dhabi, the United Arab Emirates (“UAE”).

The Bank’s mission is “Financing Infrastructure for Tomorrow,” which reflects AIIB’s commitment to sustainability, be it financial, economic, social or environmental in nature. The Bank has identified the following thematic priorities:

 

•

Green Infrastructure: Prioritizing green infrastructure and supporting its members to meet their environmental and development goals by financing projects that deliver local environmental improvements and investments dedicated to climate action;

 

•

Connectivity and Regional Cooperation: Prioritizing projects that facilitate better domestic and cross-border infrastructure connectivity within Asia and between Asia and the rest of the world, and supporting projects that complement cross-border infrastructure connectivity by generating direct measurable benefits in enhancing regional trade, investment and digital and financial integration across Asian economies and beyond;

 

•

Technology-enabled Infrastructure: Supporting projects where the application of technology delivers better value, quality, productivity, efficiency, resilience, sustainability, inclusion, transparency or better governance along the full project life cycle; and

 

•

Private Capital Mobilization: Supporting projects that directly or indirectly mobilize private financing into sectors within the Bank’s mandate.

The Bank has developed, and continues to develop, a wide range of operational policies, strategies and frameworks designed to ensure that there is a direct link between the Bank’s mandate, mission and thematic priorities and the projects it finances. Sustainable development is an integral part of the Bank’s identification, preparation and implementation of projects. In April 2021, the Bank launched its “Sustainable Development Bond Framework” which, among other things, summarizes the Bank’s sustainability commitments and the reporting that the Bank provides on its website concerning the environmental and/or social impacts of Bank financings. The Bank’s Sustainable Development Bond Framework and, unless otherwise indicated, information available on, or accessible through, AIIB’s website are not incorporated herein by reference.

Financing Portfolio

As of October 31, 2023, the Bank has approved 238 financings (including 187 loans, 33 investments in funds, three equity financings, 13 investments in fixed-income securities and two guarantees) with a total amount of US$45,175.9 million. This amount includes financings approved as of October 31, 2023 under the COVID-19 Crisis Recovery Facility (the “CRF”). See “–AIIB Response to the COVID-19 Pandemic.” Of these financings, 206 were approved by the Board of Directors with a total approved amount of US$41,723.6 million, and 32 were approved by the President, pursuant to his delegated authority to approve certain financings, with a total approved amount of US$3,452.3 million. Of the approved financings, the Bank has terminated or cancelled seven financings. Of the seven, six were loans with a total amount of US$882.0 million, and one was a fixed-income investment with a total amount of US$95.0 million.

As of October 31, 2023, the aggregate amount of approved loans, excluding terminated or cancelled loans, totaled US37,921.9 million, of which US$13,534.2 million were committed amounts and US$21,547.6 million were disbursed amounts. Committed amounts are amounts the Bank has approved and committed to provide pursuant to legally binding documentation, but has not yet disbursed. For sovereign-backed loans, these amounts are further limited to financings for which all conditions precedent required for disbursement have been satisfied. Disbursed amounts as of October 31, 2023 are on a cash basis. Disbursed amounts included in the tables below represent the gross carrying amount of the loans (i.e., including the transaction costs and fees that are capitalized through the effective interest method). Of all approved loans as of October 31, 2023, 138 were sovereign-backed and 49 were non-sovereign-backed loans; 102 were co-financings and 85 were stand-alone financings.

As of October 31, 2023, approved investments in funds totaled US$2,945.0 million, of which the Bank has disbursed US$814.5 million.

As of October 31, 2023, approved equity financings totaled US$154.0 million, of which the Bank has disbursed US$138.6 million.

As of October 31, 2023, approved investments in fixed-income securities totaled US$2,073.0 million, of which the Bank has disbursed US$1,406.6 million.

As of October 31, 2023, the approved guarantees totaled US$1,200.0 million, of which the Bank has made no disbursements.

 

3

As of October 31, 2023, approved financings (including approved financings under the CRF) span a broad range of sectors, including energy, digital infrastructure and technology, transport, urban, water, education infrastructure, economic resilience/policy-based financing (CRF), public health (CRF), finance/liquidity (CRF), rural infrastructure and agricultural development and other and, excluding multi-country financings (discussed below), would fund projects in the following members: Argentina; Azerbaijan; Bangladesh; Brazil; Cambodia; China; Cook Islands; Côte d’Ivoire; Ecuador; Egypt; Fiji; Georgia; Hong Kong, China; Hungary; India; Indonesia; Jordan; Kazakhstan; Kyrgyz Republic; Lao PDR; Maldives; Mongolia; Myanmar; Nepal; Oman; Pakistan; Philippines; Romania; Russia (as described under “–Recent Developments–AIIB Response to the Conflict in Ukraine,” all activities relating to Russia and Belarus are currently on hold and under review); Rwanda; Singapore; Sri Lanka; Tajikistan; Türkiye; Uzbekistan; and Viet Nam. As of October 31, 2023, of the approved financings, 26 (23 investments in funds, two investments in fixed-income securities and one guarantee) were classified as multi-country financings.

AIIB Response to the COVID-19 Pandemic and its Effects

The COVID-19 pandemic has had and continues to have an adverse impact on the global economy and on the individual economies of AIIB members. AIIB members continue their efforts to contain the COVID-19 pandemic and to mitigate the risks of long-lasting, structural harm to their economies. Developing economies, especially those with weak health care infrastructure, vulnerable macroeconomic or financial sector fundamentals or a high dependence on tourism, commodities exports or remittances, required support from the international financial community to respond to and contain the COVID-19 pandemic.

As part of a coordinated international response to counter the COVID-19 pandemic and its effects, AIIB has worked closely with other international financial institutions to create a network of support options, especially for the most vulnerable economies. Based on feedback from public and private sector partners, the Bank’s immediate assistance was required in three key areas: (i) immediate health care sector needs (including support for emergency public health responses and for the long-term sustainable development of the health care sector); (ii) economic resilience, mainly where clients require financing to supplement government measures supporting the social and economic response and recovery efforts (including infrastructure investments and investments in social and economic protection measures to prevent long-term damage to the productive capacity of the economy and to protect and restore productive capital); and (iii) investments in infrastructure and other productive sectors, mainly where clients might otherwise need to curtail long-term investments due to liquidity constraints.

The Bank has adopted a variety of measures to respond to the COVID-19 pandemic and its effects on AIIB members. In early April 2020, the Bank launched a US$5 billion CRF, which the Bank subsequently increased to US$5-10 billion, and then to US$13 billion due to high demand. The CRF, which is designed to adapt to emerging client needs, offers sovereign-backed and non-sovereign-backed financings for qualifying clients and projects within AIIB’s members. In March 2022, the scope was further increased to US$20 billion, and the scope of eligible CRF projects was re-focused to cover the following areas: (i) the co-financing of procurement, distribution and deployment of COVID-19 vaccines and therapeutics; (ii) the co-financing of policy-based financing for enhanced pandemic response, preparedness and recovery; and (iii) the financing of essential COVID-19 emergency health care or urgent expenditure needs. As of October 31, 2023, the Bank has approved 59 financings under the CRF, totaling US$14,657.0 million.

Representative examples of approved CRF financings that are intended to address the key areas described above include the following: i) US$200 million sovereign-backed financing in Jordan, as part of a co-financing led by the World Bank, to foster Jordan’s climate responsive investments and growth during and after the COVID-19 pandemic; (ii) a US$400 million sovereign-backed financing in Bangladesh, as part of a co-financing led by the Asian Development Bank (“ADB”), to support the deployment of policy reforms to accelerate economic recovery from the COVID-19 pandemic; and (iii) a US$530 million sovereign-backed financing, as part of a co-financing led by the World Bank, to support Uzbekistan’s inclusive market transition through reforms in a variety of sectors.

The table below sets out further information on the Bank’s approved CRF financings as of October 31, 2023.

Table 1: Overview of Approved Financings under the CRF

 

Member		Project Name		AIIB Financing				Lead Co-financier (if any)
				(in US$ million)
Azerbaijan		Republic of Azerbaijan COVID-19 Active Response and Expenditure Support Program			100.0			ADB
Bangladesh		Bangladesh COVID-19 Active Response and Expenditure Support Program			250.0			ADB
Bangladesh		Bangladesh COVID-19 Emergency and Crisis Response Facility			300.0			Standalone
Bangladesh		Bangladesh COVID-19 Emergency Response and Pandemic Preparedness Project			100.0			World Bank(1)
Bangladesh		Bangladesh Sustainable Economic Recovery Program (Subprogram 1)			250.0			ADB
Bangladesh		Bangladesh Sustainable Economic Recovery Program (Subprogram 2)			400.0			ADB
Bangladesh		Strengthening Social Resilience Program (Subprogram 2)			250.0			ADB
Cambodia		Cambodia Emergency and Crisis Response Facility			100.0			Standalone
Cambodia		Cambodia PRASAC COVID-19 Response Facility			75.0			Standalone
Cambodia		Cambodia Rapid Immunization Support Project			50.0			ADB
Cambodia		National Restoration of Rural Productive Capacity Project			60.0			Standalone
China		Emergency Assistance to China Public Health Infrastructure Project			355.0			Standalone
China		FOSUN COVID-19 Vaccine Project			100.0			IFC(2)
Cook Islands		COVID-19 Active Response and Economic Support Program			20.0			ADB
Côte d’Ivoire		Strengthening of Vaccination and Health Systems under the COVID-19 Strategic Preparedness and Response Project			100.0			World Bank

 

4

Ecuador		Corporación Financiera Nacional COVID-19 Credit Line Project			50.0			Standalone
Egypt		Inclusive Growth for Sustainable Recovery Development Policy Financing Program			360.0			World Bank
Fiji		Sustainable and Resilient Recovery Program for Fiji			50.0			ADB
Fiji		Sustained Private Sector-Led Growth Reform Program			50.0			ADB
Georgia		Georgia Emergency COVID-19 Response Project			100.0			World Bank
Georgia		Economic Management and Competitiveness Program: COVID-19 Crisis Mitigation			50.0			World Bank
Georgia		TBC Bank COVID-19 Credit Line Project			100.0			Standalone
Hungary		Emergency Assistance for Healthcare Expenditures			216.1			Standalone
India		Creating a Coordinated and Responsive Indian Social Protection System			500.0			World Bank
India		India COVID-19 Active Response and Expenditure Support Program			750.0			ADB
India		India COVID-19 Emergency Response and Health Systems Preparedness Project			500.0			World Bank
India		India Responsive COVID-19 Vaccines for Recovery			500.0			ADB
Indonesia		Additional Financing for Emergency Response to COVID-19 Program			500.0			World Bank
Indonesia		COVID-19 Active Response and Expenditure Support Program			750.0			ADB
Indonesia		Emergency Response to COVID-19 Program			250.0			World Bank
Jordan		Additional Financing for Inclusive, Transparent and Climate Responsive Investments Program			200.0			World Bank
Jordan		Inclusive Transparent and Climate Responsive Investments Program			250.0			World Bank
Kazakhstan		Kazakhstan COVID-19 Active Response and Expenditure Support Program			750.0			ADB
Kyrgyz Republic		Emergency Support for Private and Financial Sector Project			50.0			World Bank
Maldives		COVID-19 Emergency Response and Health Systems Preparedness Project			7.3			World Bank
Mongolia		Mongolia COVID-19 Rapid Response Program			100.0			ADB
Mongolia		COVID-19 Vaccine Delivery Project			21.0			ADB
Mongolia		Weathering Exogenous Shocks Program			100.0			ADB
Pakistan		Building Resilience with Countercyclical Expenditures Program			500.0			ADB
Pakistan		COVID-19 Active Response and Expenditure Support Program			500.0			ADB
Pakistan		Resilient Institutions for Sustainable Economy			250.0			World Bank
Philippines		Additional Financing: PHI Second Health System Enhancement to Address and Limit COVID-19 under Asia Pacific Vaccine Access Facility Project (HEAL2-AF)			250.0			ADB
Philippines		COVID-19 Active Response and Expenditure Support Program			750.0			ADB
Philippines		Post-COVID-19 Business and Employment Recovery Program (Subprogram 1)			500.0			ADB
Philippines		Second Health System Enhancement to Address and Limit COVID-19 (HEAL-2)			300.0			ADB
Russia		Russian Railways COVID-19 Emergency Response Project			300.0			Standalone
Rwanda		Digital Acceleration Project (Digital Investment for Recovery, Resilience and Connectivity)			100.0			World Bank
Rwanda		Private Sector Access to Finance for Post-COVID Recovery and Resilience			100.0			World Bank
Sri Lanka		Sri Lanka COVID-19 Emergency and Crisis Response Facility			180.0			Standalone
Türkiye		Akbank COVID-19 Crisis Recovery Facility			100.0			Standalone
Türkiye		COVID-19 Credit Line Project			500.0			Standalone
Türkiye		COVID-19 Medical Emergency Response Project			82.6			EBRD(3)
Türkiye		Eximbank COVID-19 Credit Line Project			250.0			Standalone
Türkiye		İşbank COVID-19 Credit Line Project			100.0			Standalone
Türkiye		Türkiye COVID-19 Vaccine Project under the CRF			250.0			World Bank
Uzbekistan		Advancing Uzbekistan Economic and Social Transformation Development Policy Operation			530.0			World Bank
Uzbekistan		Healthcare Emergency Response Project			100.0			ADB
Uzbekistan		National Bank of Uzbekistan COVID-19 Credit Line Project			200.0			Standalone
Viet Nam		VP Bank COVID-19 Response Facility			100.0			IFC
Total					14,657.0

Notes:

 

(1)	International Bank for Reconstruction and Development

(2)	International Finance Corporation

(3)	European Bank for Reconstruction and Development

AIIB is reviewing further projects to address the effects of the COVID-19 pandemic in several of its members, in some cases in collaboration with other MDBs. As of October 31, 2023, the Bank has nine proposed CRF financings in the rolling investment pipeline, totaling US$3,820.0 million. Representative examples of such projects under review include the following: (i) a US$670 million sovereign-backed financing, as part of a co-financing led by the World Bank, to support Uzbekistan’s transition to an inclusive and resilient market economy by supporting reforms that will improve fiscal risk management and support social inclusion and (ii) a US$500 million sovereign-backed financing, as part of a co-financing led by the ADB, to support the government of Indonesia in the establishment of a competitive and investment-friendly business environment in order to accelerate economic recovery from the COVID-19 pandemic.

 

5

As a temporary facility put in place to address the COVID-19 pandemic and its effects in AIIB’s members, the CRF is currently open for the approval of qualifying projects until December 31, 2023. Disbursements of financings under the CRF are generally occurring more rapidly than disbursements of AIIB’s other financings.

Geographic Distribution of Loans

The following table sets forth AIIB’s loan portfolio classified by geographic distribution:

 

		As of September 30, 2023								As of December 31, 2022
		Amount (in millions of US$)(1)				As a percentage of total loan portfolio				Amount (in millions of US$)(1)				As a percentage of total loan portfolio
Committed Amounts
Central Asia			910.1				7	%			999.9				8	%
Eastern Asia			1,173.5				10	%			1,619.7				13	%
South-Eastern Asia			1,386.8				11	%			1,453.5				11	%
Southern Asia			7,339.9				59	%			7,461.9				57	%
Western Asia			1,122.2				9	%			1,072.3				8	%
Oceania			—				0	%			—				0	%
Other Regional			—				0	%			—				0	%
Non-Regional			411.9				3	%			431.7				3	%
Total Committed			12,344.4				100	%			13,039.0				100	%
Disbursed Amounts(2)
Central Asia			1,510.5				7	%			1,426.2				8	%
Eastern Asia			1,873.5				9	%			1,318.3				7	%
South-Eastern Asia			4,207.7				20	%			3,456.9				19	%
Southern Asia			7,920.2				38	%			6,560.5				37	%
Western Asia			4,102.3				20	%			3,840.2				21	%
Oceania			122.1				1	%			120.1				1	%
Other Regional			251.6				1	%			332.4				2	%
Non-Regional			930.9				4	%			880.5				5	%
Total Disbursed			20,918.7				100	%			17,935.1				100	%

Notes:

(1)	The amounts set forth in this table include both sovereign-backed and non-sovereign-backed loans.

(2)	Disbursed amounts represent the gross carrying amount of the loans.

Loans by Sector

AIIB classifies its financings by sector and subsector. AIIB has developed the methodology for classifying financings by sector and subsector based on AIIB’s current and upcoming business focus, which reflects AIIB’s mission of “Financing Infrastructure for Tomorrow” as well as sector and non-sector strategies. The classifications were also developed by reference to sector taxonomies developed by other MDBs. AIIB recognizes that the sectors and sub-sectors in its classification methodology may be cross-cutting. As a result, although the classification methodology has been developed to provide a consistent approach to classifying financings, AIIB may exercise discretion in determining how to classify certain financings, including projects that may relate to more than one sector or be in new business areas. AIIB periodically reviews its classification methodology to enable it to continue to reflect AIIB’s priorities.

AIIB classifies its financings into 13 sectors: energy, digital infrastructure and technology, transport, urban, water, health infrastructure, education infrastructure, economic resilience/policy-based financing (CRF), public health (CRF), finance/liquidity (CRF), rural infrastructure and agricultural development, other productive sectors and other. AIIB may also classify a financing as multisector.

Financings in the energy sector mainly relate to (i) conventional energy generation; (ii) renewable energy generation, including solar, wind, hydropower, geothermal, biomass and waste, as well as hybrid forms that combine energy storage and/or multiple renewable energy generation technologies; (iii) electricity transmission and distribution; (iv) energy storage; (v) hydrogen production and transportation; (vi) gas processing, storage, transportation and distribution; (vii) district heating and cooling networks; and (viii) energy efficiency and demand-side management.

Financings in the digital infrastructure and technology sector mainly relate to digital infrastructure and technology that is applicable to infrastructure, and include projects to support (i) connectivity; (ii) data processing and storage; (iii) development of new software and applications; and (iv) interfaces between users, digital services and applications through terminals and devices.

Financings in the transport sector mainly relate to (i) road connectivity and safety; (ii) railway projects; (iii) port and other waterway infrastructure; (iv) aviation; (v) urban transportation; and (vi) other issues related to transport logistics.

 

6

Financings in the urban sector mainly relate to (i) urban re-development; (ii) affordable housing; (iii) projects for the improvement of urban public services, such as street lighting, park facilities and digital public service delivery portals; (iv) integrated waste management; (v) renovation and protection of cultural heritage; (vi) urban tourism; (vii) urban resilience in the form of systems or facilities that enable cities to maintain continuity during shocks and stress; and (viii) urban integrated development in the form of multisectoral urban or suburban development initiatives, such as industrial parks, special economic zones, commercial business districts, new district development and satellite cities.

Financings in the water sector mainly relate to (i) water supply, sanitation and wastewater treatment; (ii) irrigation and drainage; (iii) water resources management; and (iv) water disaster resilience.

Financings in the health infrastructure sector mainly relate to (i) the construction, rehabilitation, upgrade and expansion of health care facilities; (ii) the digitalization of health care service; (iii) the improvement of energy efficiency; and (iv) the improvement of vaccine manufacturing processes.

Financings in the education infrastructure sector mainly relate to (i) the construction, rehabilitation, upgrade and expansion of educational facilities and (ii) the development of the digital infrastructure of schools.

The economic resilience/policy-based financing, public health and finance/liquidity sectors represent financings under the CRF. Economic resilience/policy-based financings are designed to supplement government measures supporting the social and economic response and recovery efforts (including infrastructure investments and investments in social and economic protection measures to prevent long-term damage to the productive capacity of the economy and to protect and restore productive capital) in cases such as the COVID-19 pandemic. Financings in the public health sector are designed to address immediate health care sector needs (including support for emergency public health responses and for the long-term sustainable development of the health care sector). Financings in the finance/liquidity sector mainly relate to (i) capital markets transactions; (ii) loans to financial institutions; and (iii) investment funds transactions.

Financings in the rural infrastructure and agricultural development sector mainly relate to (i) land conservation and soil management and (ii) the support of rural market infrastructure.

Financings in other productive sectors mainly relate to projects that support industry, non-urban tourism and agricultural production.

Financings in other sectors include projects that support disaster prevention and rehabilitation.

The following table sets forth AIIB’s loan portfolio by sector, as classified by AIIB in accordance with the methodology described above:

 

		As of September 30, 2023								As of December 31, 2022
		Amount (in millions of US$)(1)				As a percentage of total loan portfolio				Amount (in millions of US$)(1)				As a percentage of total loan portfolio
Committed Amounts
Energy			2,833.5				23	%			2,914.4				22	%
Digital Infrastructure and Technology			22.8				0	%			76.2				1	%
Transport			4,458.7				36	%			3,905.3				30	%
Urban			907.9				7	%			1,056.4				8	%
Water			2,515.7				20	%			2,779.2				21	%
Health Infrastructure			—				0	%			—				0	%
Education Infrastructure			130.6				1	%			196.4				1	%
Economic Resilience/PBF(2) (CRF)			253.8				2	%			269.4				2	%
Public Health (CRF)			643.0				5	%			887.0				7	%
Finance/Liquidity (CRF)			149.8				1	%			410.7				3	%
Rural Infrastructure and Agricultural Development			55.0				0	%			71.0				1	%
Other Productive Sectors			—				0	%			—				0	%
Other			59.0				0	%			67.0				1	%
Multisector			314.7				3	%			406.0				3	%
Total Committed			12,344.4				100	%			13,039.0				100	%
Disbursed Amounts(3)
Energy			3,188.5				15	%			3,007.5				17	%
Digital Infrastructure and Technology			185.8				1	%			133.6				1	%
Transport			2,036.1				10	%			1,373.2				8	%
Urban			968.2				5	%			854.9				5	%
Water			1,115.4				5	%			848.4				5	%
Health Infrastructure			—				0	%			—				0	%

 

7

		As of September 30, 2023								As of December 31, 2022
		Amount (in millions of US$)(1)				As a percentage of total loan portfolio				Amount (in millions of US$)(1)				As a percentage of total loan portfolio
Education Infrastructure			120.9				1	%			53.5				0	%
Economic Resilience/PBF(CRF)			8,006.9				38	%			6,884.3				37	%
Public Health (CRF)			2,963.3				14	%			2,861.5				16	%
Finance/Liquidity (CRF)			1,917.9				9	%			1,799.5				10	%
Rural Infrastructure and Agricultural Development			27.7				0	%			11.1				0	%
Other Productive Sectors			—				0	%			—				0	%
Other			21.3				0	%			13.0				0	%
Multisector			366.8				2	%			94.6				1	%
Total Disbursed			20,918.7				100	%			17,935.1				100	%

Notes:

(1)

The amounts set forth in this table include both sovereign-backed and non-sovereign-backed loans.

(2)

PBF refers to policy-based extension financing.

(3)

Disbursed amounts represent the gross carrying amount of the loans.

Loan Maturity

As of September 30, 2023, based on the final repayment date of the loans, US$ 2,093.8 million of AIIB’s committed and disbursed loans is scheduled to mature through 2027, US$ 12,905.6 million is scheduled to mature in 2028-2038 and US$ 18,263.8 million is scheduled to mature from 2039 onwards.

Ten Largest Borrowers

The following table sets forth the aggregate principal amount of loans (reflecting amounts that are both committed and disbursed) to AIIB’s 10 largest borrowers (including both sovereign-backed and non-sovereign-backed borrowers) as of September 30, 2023:

 

Borrower		Amount (in millions of US$)				As a percentage of total loan portfolio
Republic of India			8,478.7				25.6	%
People’s Republic of Bangladesh			3,400.3				10.3	%
Republic of Indonesia			2,362.6				7.1	%
People’s Republic of China			2,290.5				6.9	%
Islamic Republic of Pakistan			2,185.3				6.6	%
Republic of the Philippines			2,034.6				6.1	%
Republic of Uzbekistan			1,371.7				4.1	%
Republic of Türkiye			935.0				2.8	%
Ministry of Finance of Kazakhstan			711.5				2.1	%
Turkiye Kalkinma ve Yatirim Bankasi			610.3				1.8	%

Income Statement

Interest Income

Interest income mainly consists of (i) interest earned on loan investments, including the amortization of front-end fees and other costs related to loan origination; (ii) interest earned on cash, cash equivalents and deposits (primarily, term deposits); and (iii) interest earned on bond investments.

Nine Months Ended September 30, 2023 and 2022. AIIB’s total interest income increased to US$1,381.8 million for the nine months ended September 30, 2023 from US$371.3 million for the nine months ended September 30, 2022, mainly as a result of increases in interest income earned on loan investments, on cash, cash equivalents and deposits and on bond investments. Interest income from loan investments increased to US$874.5 million for the nine months ended September 30, 2023 from US$246.6 million for the nine months ended September 30, 2022, mainly due to an increase in AIIB’s loan volume as well as higher interest rates. Interest income from cash, cash equivalents and deposits increased to US$384.4 million for the nine months ended September 30, 2023 from US$79.0 million for the nine months ended September 30, 2022, mainly due to a higher interest rate environment. Interest income from bond investments increased to US$122.9 million for the nine months ended September 30, 2023 from US$45.8 million for the nine months ended September 30, 2022, mainly as a result of an increase in bond investments combined with a higher interest rate environment.

For the nine months ended September 30, 2023, 63% of AIIB’s total interest income was from loan investments, 28% was from cash, cash equivalents and deposits and 9% was from bond investments. For the nine months ended September 30, 2022, 66% of AIIB’s total interest income was from loan investments, 21% was from cash, cash equivalents and deposits and 12% was from bond investments.

 

8

Interest Expense

Nine Months Ended September 30, 2023 and 2022. AIIB’s interest expense increased to US$563.9 million for the nine months ended September 30, 2023 from US$200.7 million for the nine months ended September 30, 2022, mainly as a result of higher interest rates and a net increase in outstanding bond issuances. Since September 30, 2022 and through September 30, 2023, AIIB (i) issued (a) US$2,000 million principal amount of 4.000% notes due 2028; (b) US$2,000 million principal amount of 4.875% notes due 2026; (c) US$566.4 million equivalent of fixed rate notes under its Renminbi Bonds Issuance Programme; (d) US$1,761.8 million equivalent of zero coupon notes under AIIB’s Euro-Commercial Paper Programme; (e) US$372.0 million equivalent of fixed rate notes under AIIB’s A$ and NZ$ Debt Issuance Programme; (f)US$100.0 million equivalent of floating rate notes through private placement in the local onshore market in Georgia and (g) US$5,014.7 million equivalent of fixed rate and zero coupon notes and US$50.0 million of floating rate notes under AIIB’s Global Medium Term Note Programme; (ii) and repaid (a) US$3,000 million principal amount of 0.250% notes due 2023 issued in 2020, (b) US$424.6 million equivalent of fixed rate notes issued under the Bank’s Renmibi Bonds Issuance Programme; (c) US$1,347.8 million equivalent of zero coupon notes issued under AIIB’s Euro-Commercial Paper Programme; (d) US$1,403.1 million principal amount of fixed rate notes issued under AIIB’s Global Medium Term Notes Programme; and (e) US$364.0 million equivalent of fixed rate notes issued under AIIB’s A$ and NZ$ Debt Issuance Programme.

Net Interest Income

Net interest income is interest income less interest expense.

Nine Months Ended September 30, 2023 and 2022. Mainly for the reasons set forth above, AIIB’s net interest income increased to US$817.9 million for the nine months ended September 30, 2023 from US$170.7 million for the nine months ended September 30, 2022.

Net Fee and Commission Income

Net fee and commission income mainly consists of loan commitment and service fees charged to borrowers less co-financing service fees paid in respect of co-financing arrangements.

Nine Months Ended September 30, 2023 and 2022. AIIB’s net fee and commission income decreased to US$24.8 million for the nine months ended September 30, 2023 from US$26.5 million for the nine months ended September 30, 2022, mainly as a result of an increase in co-financing service fees paid in respect of co-financing arrangements. Total co-financing service fees paid in respect of co-financing arrangements increased to US$3.4 million for the nine months ended September 30, 2023 from US$1.9 million for the nine months ended September 30, 2022.

Net Gain on Financial Instruments Measured at Fair Value through Profit or Loss

Net gain on financial instruments measured at fair value through profit or loss mainly reflects the change in fair value of AIIB’s investments in (i) money market funds; (ii) bond investments of high credit quality measured at fair value through profit or loss managed as part of AIIB’s treasury investment portfolio; (iii) bond investments measured at fair value through profit or loss managed as part of AIIB’s investment operations; (iv) limited partnership funds managed by general partners that make investment decisions on behalf of the limited partners of such funds (including AIIB); (v) investments in trust; (vi) a fixed-income portfolio managed by an external asset manager whose primary objective is to develop climate bond markets in Asia; (vii) portfolios of high credit quality securities managed by external asset managers engaged by AIIB; and (viii) high credit quality certificates of deposit and commercial paper which are actively managed as part of the Bank’s treasury portfolio, as well as changes in the fair value of AIIB’s own borrowings and derivatives.

Nine Months Ended September 30, 2023 and 2022. AIIB’s net gain on financial instruments measured at fair value through profit or loss increased to US$187.1 million for the nine months ended September 30, 2023 from US$155.4 million for the nine months ended September 30, 2022. The net gain for the nine months ended September 30, 2023 was mainly due to gains on (i) derivatives held by AIIB to hedge its treasury investment portfolio, (ii) AIIB’s treasury investment portfolio, including bond investments of high credit quality, high credit quality certificates of deposit and commercial paper, money market funds and portfolios of high credit quality securities managed by external asset managers engaged by AIIB; (iii) limited partnership funds managed by general partners that make investment decisions on behalf of the limited partners of such funds (including AIIB) and investments in trust, as well as on bond investments managed as part of AIIB’s investment operations; and (iv) a fixed-income portfolio managed by an external asset manager whose primary objective is to develop climate bond markets in Asia. The net gain on financial instruments measured at fair value through profit or loss for the nine months ended September 30, 2023 was offset in part by fair value losses on derivatives AIIB has entered into for hedging AIIB’s own borrowings. The net gain for the nine months ended September 30, 2022 was mainly due to fair value gains on the derivatives held by AIIB to hedge its portfolio of local currency denominated loans, offset in part by fair value losses on AIIB’s portfolios of high credit quality securities managed by external asset managers engaged by AIIB and fair value losses on the fixed income portfolio managed by an external asset manager whose primary objective is to develop climate bond markets in Asia.

Net Loss on Financial Instruments Measured at Amortized Cost

Net loss on financial instruments measured at amortized cost reflects the change in amortized cost of the Bank’s investments in (i) a fixed-income portfolio of high credit quality securities with a hold-to-maturity strategy managed by an external asset manager engaged by AIIB; (ii) a fixed-income portfolio of high credit quality securities with a hold-to-maturity strategy, managed internally by AIIB; and (iii) a fixed-income portfolio which comprises primarily Asian infrastructure-related bonds.

Nine Months Ended September 30, 2023 and 2022. AIIB’s net loss on financial instruments measured at amortized cost was US$4.4 million for the nine months ended September 30, 2023 and US$13.2 million for the nine months ended September 30, 2022. The net loss for the nine months ended September 30, 2023 and the nine months ended September 30, 2022 mainly resulted from the disposal of certain bonds in AIIB’s fixed-income portfolios.

 

9

Share of Gain on Investment in Associate

In April 2020, the Bank subscribed for a 30% economic interest in an entity incorporated in Singapore (the “Associate”), thereby giving the Bank significant influence over the financial and operating decisions of the Associate. Share of gain or loss on investment in associate reflects AIIB’s share in the gain or loss recognized by the Associate in the respective period.

Nine Months Ended September 30, 2023 and 2022. AIIB’s share of gain on investment in associate for the nine months ended September 30, 2023 was US$3.3 million. The share of gain on investment in associate for the nine months ended September 30, 2022 was US$0.6 million. The share of gain on investment in associate for the nine months ended September 30, 2023 mainly resulted from higher operating income generated by the Associate.

Impairment Provision

AIIB uses an expected credit loss (“ECL”) model to estimate credit losses on financial assets, such as loan disbursements or bond investments, and on other instruments, such as undrawn loan commitments. AIIB recognizes an ECL allowance at each reporting date and recognizes an impairment provision (either an impairment loss or the reversal of an impairment loss) that reflects the change in the ECL allowance between such reporting date and the previous reporting date. Impairment provisions are driven in large part by changes in loan volumes, risk parameters related to macroeconomic outlook and changes in AIIB’s assessment of the credit risk of individual financings.

Nine Months Ended September 30, 2023 and 2022. AIIB’s impairment provision was US$13.7 million for the nine months ended September 30, 2023, compared to US$158.7 million for the nine months ended September 30, 2022.

The impairment provision recognized in the nine months ended September 30, 2023 was mainly due to (i) changes in the risk parameters of certain sovereign-backed and non-sovereign-backed loans, and (ii) an increase in outstanding loan volumes.

The impairment provision recognized in the nine months ended September 30, 2022 was mainly due to (i) increases in the credit risks associated with certain non-sovereign-backed loans; (ii) the assessment as credit impaired of seven bond investments in the fixed-income portfolio, which comprises primarily Asian infrastructure-related bonds, and their transfer to Stage 3; and (iii) an increase in outstanding loan volumes.

General and Administrative Expenses

General and administrative expenses mainly consist of (i) staff costs, such as short-term employee benefits, including salaries, location premiums and medical and life insurance, and costs related to AIIB’s defined contribution (i.e., retirement) plans; (ii) professional service expenses; (iii) IT services; (iv) facilities and administration expenses; (v) travel expenses; (vi) issuance cost in respect of borrowings; and (vii) other expenses.

Nine Months Ended September 30, 2023 and 2022. AIIB’s general and administrative expenses increased to US$164.2 million for the nine months ended September 30, 2023 from US$131.9 million for the nine months ended September 30, 2022, mainly due to an increase in staff costs, travel expenses, issuance cost for borrowings, professional service expenses and costs related to IT. Mainly as the result of the continuing ramp-up of AIIB’s organizational activities, staff costs increased to US$86.1 million for the nine months ended September 30, 2023 from US$71.3 million for the nine months ended September 30, 2022. Mainly as a result of the gradual lifting of travel restrictions put in place in response to the COVID-19 pandemic, costs related to travel expenses increased to US$10.3 million for the nine months ended September 30, 2023 from US$2.2 million for the nine months ended September 30, 2022. Issuance cost for borrowings increased to US$9.2 million for the nine months ended September 30, 2023 from US$5.3 million for the nine months ended September 30, 2022, due to an increase in the amount of issuances in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Professional service expenses increased to US$23.1 million for the nine months ended September 30, 2023 from US$21.1 million for the nine months ended September 30, 2022. Costs related to IT services increased to US$15.4 million for the nine months ended September 30, 2023 from US$14.2 million for the nine months ended September 30, 2022.

Net Foreign Exchange Loss

Net foreign exchange loss or gain reflects the change in value, due to movements in currency exchange rates, of financial instruments held by the Bank that are measured at amortized cost. For financial instruments held by the Bank measured at fair value through profit or loss, the change in value due to movements in currency exchange rates is reported as part of their overall change in fair value through profit or loss. See “–Net Gain on Financial Instruments Measured at Fair Value through Profit or Loss.”

Nine Months Ended September 30, 2023 and 2022. AIIB had a net foreign exchange loss of US$142.2 million for the nine months ended September 30, 2023, compared to a net foreign exchange loss of US$97.4 million for the nine months ended September 30, 2022. The net foreign exchange loss for the nine months ended September 30, 2023 was mainly due to foreign exchange losses from the depreciation of the Russian ruble against the U.S. dollar and the impact such depreciation had on the U.S. dollar value of the Bank’s outstanding Russian ruble denominated loan. See “Recent Developments–AIIB Response to the Conflict in Ukraine.” These losses were partially offset by foreign exchange gains deriving from fair value movements on financial instruments held by the Bank to mitigate currency risks, namely, swaps. The net foreign exchange loss for the nine months ended September 30, 2022 was mainly due to the depreciation of the Euro, the Chinese yuan, the Indian rupee and the Turkish lira against the U.S. dollar and the impact such depreciations had on the U.S. dollar value of the Bank’s portfolio of local currency denominated loans (partially offset by the appreciation of the Russian ruble against the U.S. dollar and the impact such appreciation had on the U.S. dollar value of the Bank’s exposure to a Russian ruble-denominated loan). Such net foreign exchange gain for the nine months ended September 30, 2022 was largely offset, however, by fair value movements on financial instruments held by the Bank to mitigate currency risks, namely, swaps.

 

10

Operating Profit or Loss

Nine Months Ended September 30, 2023 and 2022. Mainly for the reasons set forth above, AIIB’s operating profit was US$708.5 million for the nine months ended September 30, 2023, compared to an operating loss of US$48.2 million for the nine months ended September 30, 2022.

Accretion of Paid-in Capital Receivables

Paid-in capital receivables represent amounts due from the Bank’s members in respect of paid-in capital. These amounts are initially recognized at fair value, which reflects the discounted present value of future paid-in capital inflows, and subsequently measured at amortized cost. The difference between amortized cost and fair value is accounted for as a reserve under members’ equity and is accreted through the income statement using the effective interest method.

Nine Months Ended September 30, 2023 and 2022. AIIB’s accretion of paid-in capital receivables decreased to US$1.0 million for the nine months ended September 30, 2023 from US$1.9 million for the nine months ended September 30, 2022. This decrease was mainly due to lower contractual balances in paid-in capital receivables as of September 30, 2023 compared to September 30, 2022.

Other Comprehensive Income

For financial liabilities, such as AIIB’s borrowings, that are designated at fair value through profit or loss, fair value changes attributable to changes in AIIB’s own credit risk are recognized in other comprehensive income (while other fair value changes are recognized under net gain or loss on financial instruments measured at fair value through profit or loss). Upon maturity of such financial liabilities, the recognition in other comprehensive income of fair value changes attributable to changes in AIIB’s own credit risk is reversed.

Nine Months Ended September 30, 2023 and 2022. AIIB experienced an unrealized loss on borrowings arising from changes in AIIB’s own credit risk of US$99.2 million for the nine months ended September 30, 2023, compared to an unrealized gain of US$82.3 million for the nine months ended September 30, 2022. This change was mainly the result of the tightening of the Bank’s overall credit spread against the relevant benchmark discount curves, particularly the U.S. dollar discount curves. The tightening of the Bank’s own credit spread reflected decreases in credit spreads in financial markets in the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

Total Comprehensive Income

Nine Months Ended September 30, 2023 and 2022. Mainly for the reasons set forth above, AIIB’s total comprehensive income increased to US$610.3 million for the nine months ended September 30, 2023 from US$36.0 million for the nine months ended September 30, 2022.

Balance Sheet

Assets

Total assets mainly consist of (i) loan investments at amortized cost; (ii) investments at fair value through profit or loss; (iii) bond investments at amortized cost; (iv) term deposits with initial maturities of more than three months; (v) cash and cash equivalents; (vi) cash collateral receivables; (vii) derivative assets; and (viii) paid-in capital receivables.

Investments at fair value through profit or loss mainly consist of (i) bond investments of high credit quality measured at fair value through profit or loss; (ii) the Bank’s investments in portfolios of high credit quality securities managed by external asset managers engaged by AIIB and measured at fair value through profit or loss; and (iii) high credit quality certificates of deposit and commercial paper, which are actively managed as part of the Bank’s treasury portfolio. Bond investments at amortized cost consist of (i) a fixed-income portfolio of high credit quality securities with a hold-to-maturity strategy managed by an external asset manager engaged by AIIB; (ii) a fixed-income portfolio of high credit quality securities with a hold-to-maturity strategy, managed internally by AIIB; and (iii) a fixed-income portfolio which comprises primarily Asian infrastructure-related bonds. Cash and cash equivalents consist of (i) term deposits with initial maturities of three months or less; (ii) money market funds; and (iii) demand deposits. Cash collateral receivables reflect the collateral paid to swap counterparties.

Assets of the Bank include high-quality liquid assets, which are defined as cash or assets that can be converted into cash at little or no loss in value.

As of September 30, 2023 and December 31, 2022. As of September 30, 2023, AIIB’s total assets were US$53,048.6 million, compared to total assets of US$47,409.2 million as of December 31, 2022. This increase resulted mainly from (i) an increase of US$3,872.1 million in investments at fair value through profit or loss; (ii) an increase of US$3,136.2 million in bond investments at amortized cost; (iii) an increase of US$2,971.6 million in loan investments at amortized cost; and (iv) an increase of US$179.2 million in derivative assets offset in part by (a) a decrease of US$3,468.0 million in term deposits; (b) a decrease of US$878.8 million in cash and cash equivalents; and (c) a decrease of US$214.9 million in cash collateral receivables.

 

11

Liabilities

Total liabilities mainly consist of (i) borrowings; (ii) derivative liabilities; (iii) prepaid paid-in capital; and (iv) other liabilities, such as cash collateral payables, payable and advance receipt for unsettled trades, deferred interest, accrued expenses, staff costs payable, lease liability and provisions.

As of September 30, 2023 and December 31, 2022. As of September 30, 2023, AIIB’s total liabilities were US$31,962.1 million, compared to total liabilities of US$26,943.5 million as of December 31, 2022. This increase resulted primarily from (i) an increase of US$4,845.7 million in borrowings (see under “–Income Statement–Interest Expense”) and (ii) an increase of US$275.5 million in other liabilities mainly associated with an increase in payable and advance receipt for unsettled trades.

Members’ Equity

Members’ equity consists of (i) paid-in capital; (ii) retained earnings; (iii) reserves for unrealized loss or gain on borrowings measured at fair value attributable to changes in the Bank’s own credit risk; and (iv) reserves for accretion of paid-in capital receivables.

As of September 30, 2023 and December 31, 2022. As of September 30, 2023, AIIB’s total members’ equity was US$21,086.5 million, compared to total members’ equity of US$20,465.7 million as of December 31, 2022. This increase mainly resulted from an increase of US$708.5 million in retained earnings.

Asset Quality

As of September 30, 2023, no AIIB assets were categorized as overdue or written off, except for (i) a non-sovereign-backed loan that was assessed as credit impaired with an amount of US$4.6 million (carrying amount net of the associated ECL allowance); (ii) seven bond investments measured at amortized cost that were assessed as credit impaired with a carrying amount of US$0.7 million (carrying amount net of the associated ECL allowance); (iii) four bond investments measured at fair value through profit or loss that were assessed as non-performing with an amount of US$3.5 million (fair value); and (iv) US$198.6 million of overdue contractual undiscounted paid-in capital receivables, which are not considered impaired.

Recent Developments

AIIB Response to the Conflict in Ukraine

On March 3, 2022, in response to events taking place in Ukraine, the Bank announced it would place all activities relating to Russia and Belarus on hold and under review, including all Russia- and Belarus-related projects in the Bank’s rolling investment pipeline. AIIB’s exposure to Russia and to the Russian ruble (“RUB”), including through its financing activities, borrowings and governance and administration, is limited, consisting of the following:

 

•

Financing activities. The Bank has one loan outstanding to a borrower in Russia, a RUB-denominated loan of RUB24 billion (approximately US$300 million as of the time of approval). The aggregate amount of this loan represents less than 1.0% of the total commitments and less than 1.5% of the total disbursements in AIIB’s overall loan portfolio as of October 31, 2023. This loan was approved in October 2020 and made to JSC Russian Railways (“RZD”), under the CRF, to support RZD against adverse effects of the COVID-19 pandemic. RZD is subject to U.S. sanctions that prohibit certain dealings in certain newly issued debt or equity of RZD (issued on or after March 26, 2022). RZD is also subject to European Union sanctions that prohibit certain dealings in certain newly issued debt or equity of RZD (issued after April 12, 2022) and making new loans or credit to RZD after February 26, 2022. In the event the Bank were required to comply with these prohibitions related to RZD, they would be inapplicable to the Bank’s outstanding loan to RZD, which was fully disbursed as of December 2020. RZD is, as of March 24, 2022, also subject to an asset freeze under United Kingdom sanctions. The Bank does not believe that any transactions related to its outstanding loan to RZD will have a nexus to the United Kingdom. As of October 31, 2023, all funds in which the Bank has investments that are classified as multi-country financings have divested any securities that provided the Bank with direct or indirect exposure to Russia. As a result, the Bank has no such exposure through its investments in these funds.

 

•

Borrowings. AIIB has issued four series of bonds denominated in RUB under its Global Medium Term Note Programme. One of these series of bonds remains outstanding, with an aggregate amount outstanding of RUB6.7 billion (approximately US$88.8 million equivalent as of October 31, 2023), which represents less than 0.3% of AIIB’s outstanding borrowings as of October 31, 2023. All RUB-denominated bonds issued by AIIB were hedged at the time of issuance to remove the associated interest rate and foreign exchange risk. The terms and conditions of these bonds allow for the Bank to make principal or interest payments in U.S. dollars in certain circumstances, including if the RUB is not used in the international banking community.

 

•

Governance and administration. The Governor appointed by Russia to AIIB’s Board of Governors is currently a subject of sanctions imposed by the United States, European Union, United Kingdom and certain other jurisdictions. AIIB does not expect that these sanctions, or other sanctions that may be imposed on Governors or Directors of AIIB appointed by Russia, would be reasonably likely to affect the Bank’s operations. Neither AIIB’s Governors nor its Directors have signing authority over the Bank’s operations, and no individual Governor or Director has sole or majority decision making power with respect to the Bank. One member of AIIB’s senior management is a Russian national. This individual is not a subject of sanctions imposed by any jurisdiction.

 

12

AIIB does not have exposure to Belarus or the Belarussian ruble, other than with respect to the same governance matters and processes common to all non-regional members.

 

13

Exhibit 13

 

 

Asian Infrastructure Investment Bank

Condensed Financial Statements (Unaudited)

for the Nine Months Ended Sep. 30, 2023

 

Contents

Financial Statements

 

Condensed Statement of Comprehensive Income			1
Condensed Statement of Financial Position			2
Condensed Statement of Changes in Equity			3
Condensed Statement of Cash Flows			4
Notes to the Condensed Financial Statements			5-46
A.      General Information			5
B.      Accounting Policies			5-6
C.      Disclosure Notes			7-30
D.      Financial Risk Management			31-42
E.      Fair Value Disclosure			43-46

Asian Infrastructure Investment Bank

Condensed Statement of Comprehensive Income

For the nine months ended Sep. 30, 2023

 

In thousands of US Dollars		Note		For the nine months ended Sep. 30, 2023 (unaudited)				For the nine months ended Sep. 30, 2022 (unaudited)
Interest income		C1			1,381,793				371,340
Interest expense		C1			(563,915	)			(200,690	)
Net interest income					817,878				170,650
Net fee and commission income		C2			24,760				26,481
Net gain on financial instruments measured at fair value through profit or loss		C3			187,068				155,355
Net loss on financial instruments measured at amortized cost		C9			(4,406	)			(13,172	)
Share of gain on investment in associate		C10			3,313				573
Impairment provision		C4			(13,732	)			(158,673	)
General and administrative expenses		C5			(164,222	)			(131,948	)
Net foreign exchange loss					(142,181	)			(97,439	)
Operating profit/(loss) for the period					708,478				(48,173	)
Accretion of paid-in capital receivables		C11			1,015				1,866
Net profit/(loss) for the period					709,493				(46,307	)
Other comprehensive income Items will not be reclassified to profit or loss
Unrealized (loss)/gain on fair-valued borrowings arising from changes in own credit risk		C13			(99,229	)			82,321
Total comprehensive income					610,264				36,014
Attributable to:
Equity holders of the Bank					610,264				36,014

The accompanying notes are an integral part of these financial statements.

 

1

Asian Infrastructure Investment Bank

Condensed Statement of Financial Position

As at Sep. 30, 2023

 

In thousands of US Dollars		Note		Sep. 30, 2023 (unaudited)				Dec. 31, 2022 (audited)
Assets
Cash and cash equivalents		C6			2,198,509				3,077,356
Term deposits		C6			3,201,055				6,669,005
Investments at fair value through profit or loss		C7			16,574,052				12,701,947
Loan investments, at amortized cost		C8			20,613,499				17,641,931
Bond investments, at amortized cost		C9			7,701,427				4,565,178
Paid-in capital receivables		C11			269,388				304,862
Derivative assets		C14			656,653				477,469
Investment in associate		C10			58,489				49,176
Property and equipment					5,476				4,365
Intangible assets					5,957				6,712
Other assets		C12			1,764,080				1,911,247
Total assets					53,048,585				47,409,248
Liabilities
Borrowings		C13			29,321,439				24,475,728
Derivative liabilities		C14			2,182,982				2,286,664
Prepaid paid-in capital					1,000				-
Other liabilities		C15			456,675				181,131
Total liabilities					31,962,096				26,943,523
Members’ equity
Paid-in capital		C16			19,403,400				19,392,900
Reserves
Accretion of paid-in capital receivables					(1,253	)			(2,268	)
Unrealized (loss)/gain on fair-valued borrowings arising from changes in own credit risk					(89,681	)			9,548
Retained earnings					1,774,023				1,065,545
Total members’ equity					21,086,489				20,465,725
Total liabilities and members’ equity					53,048,585				47,409,248

The accompanying notes are an integral part of these financial statements

 

2

Asian Infrastructure Investment Bank

Condensed Statement of Changes in Equity

For the nine months ended Sep. 30, 2023

 

																Reserves
In thousands of US Dollars		Note		Subscribed capital				Less: callable capital				Paid-in capital				Accretion of paid-in capital receivables				Unrealized (loss)/gain on fair-valued borrowings arising from changes in own credit risk				Retained earnings				Total members’ equity
Jan. 1, 2022					96,775,100				(77,420,100	)			19,355,000				(3,463	)			(61,622	)			876,003				20,165,918
Capital subscription and contribution					189,600				(151,700	)			37,900				-				-				-				37,900
Net loss for the period					-				-				-				-				-				(46,307	)			(46,307	)
Other comprehensive income					-				-				-				-				82,321				-				82,321
Paid-in capital receivables - accretion effect					-				-				-				(1,162	)			-				-				(1,162	)
Transfer of accretion		C11			-				-				-				1,866				-				(1,866	)			-
Sep. 30, 2022 (unaudited)		C16			96,964,700				(77,571,800	)			19,392,900				(2,759	)			20,699				827,830				20,238,670
Jan. 1, 2023					96,964,700				(77,571,800	)			19,392,900				(2,268	)			9,548				1,065,545				20,465,725
Capital subscription and contribution					52,600				(42,100	)			10,500				-				-				-				10,500
Net profit for the period					-				-				-				-				-				709,493				709,493
Other comprehensive income					-				-				-				-				(99,229	)			-				(99,229	)
Paid-in capital receivables - accretion effect					-				-				-				-				-				-				-
Transfer of accretion		C11			-				-				-				1,015				-				(1,015	)			-
Sep. 30, 2023 (unaudited)		C16			97,017,300				(77,613,900	)			19,403,400				(1,253	)			(89,681	)			1,774,023				21,086,489

The accompanying notes are an integral part of these financial statements.

 

3

Asian Infrastructure Investment Bank

Condensed Statement of Cash Flows

For the nine months ended Sep. 30, 2023

 

In thousands of US Dollars		Note				For the nine months ended Sep. 30, 2023 (unaudited)				For the nine months ended Sep. 30, 2022 (unaudited)
Cash flows from operating activities
Net profit/(loss) for the period							709,493				(46,307	)
Adjustments for:
Interest income from term deposits							(240,592	)			(58,662	)
Interest expense			C13,C1				557,642				194,465
Issuance cost for borrowings			C5				9,169				5,348
Accretion of paid-in capital receivables			C11				(1,015	)			(1,866	)
Net gain on financial instruments measured at fair value through profit or loss							(133,007	)			(144,658	)
Share of gain on investment in associate			C10				(3,313	)			(573	)
Impairment provision			C4				13,732				158,673
Depreciation and amortization							2,316				1,915
Increase in loan investments			C8				(2,983,635	)			(3,011,236	)
Increase in bond in investment operations portfolio							(439,112	)			(58,287	)
Net cash (paid for)/received from derivatives							(680,593	)			48,894
Decrease/(increase) in other assets							147,257				(1,785,366	)
Increase in other liabilities							274,958				82,721
Net cash used in operating activities							(2,766,700	)			(4,614,939	)
Cash flows from investing activities
Increase in investment of funds, trusts and others							(211,408	)			(247,624	)
Dividends received and return of capital contributions							28,708				44,415
Bond at amortized cost purchased in treasury investment portfolio							(2,991,270	)			(2,028,501	)
Net purchase in other treasury investment							(3,115,137	)			(844,012	)
Decrease in term deposits							3,432,061				1,750,000
Increase in investment in associate							(6,000	)			(13,500	)
Interest received from term deposits							276,479				33,533
Increase in intangible assets, property and equipment							(1,709	)			(2,808	)
Net cash used in investing activities							(2,588,276	)			(1,308,497	)
Cash flows from financing activities
Proceeds from borrowings, net			C13				11,374,978				7,058,185
Repayments of borrowings			C13				(6,528,330	)			(376,313	)
Interest payments on borrowings			C13				(418,508	)			(148,709	)
Capital contributions received			C11				46,989				26,257
Prepaid paid-in capital received							1,000				-
Net cash from financing activities							4,476,129				6,559,420
Net (decrease)/increase in cash and cash equivalents							(878,847	)			635,984
Cash and cash equivalents at beginning of period							3,077,356				2,109,608
Cash and cash equivalents at end of period			C6				2,198,509				2,745,592

The accompanying notes are an integral part of these financial statements.

 

4

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

A

General Information

The Asian Infrastructure Investment Bank (the “Bank” or “AIIB”) is a multilateral development bank. By the end of year 2015, representatives from 57 countries signed AIIB’s Articles of Agreement (the “AOA”) which entered into force on Dec. 25, 2015. The Bank commenced operations on Jan. 16, 2016. AIIB’s principal office is in Beijing, the People’s Republic of China (the “PRC”).

As at Sep. 30, 2023, the Bank’s total approved membership is 109, of which 93 have completed the membership process and have become members of AIIB in accordance with the AOA.

AIIB’s purpose is to (i) foster sustainable economic development, create wealth and improve infrastructure connectivity in Asia by investing in infrastructure and other productive sectors; and (ii) promote regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions.

The legal status, privileges and immunities for the operation and functioning of AIIB in the PRC are agreed in the AOA and further defined in the Headquarters Agreement between the government of the People’s Republic of China (the “Government”) and the Bank on Jan. 16, 2016.

The Bank’s first overseas office, an Interim Operational Hub (the “Hub”), was established in Abu Dhabi, the United Arab Emirates, upon the government of the United Arab Emirates (the “UAE”) and the Bank signing an agreement regarding the establishment of an office in the UAE on April 19, 2023. The Hub provides proximity to global financial centers and connectivity with the international infrastructure ecosystem which is important in maintaining AIIB’s growth momentum.

 

B

Accounting Policies

 

B1

Basis of preparation

These condensed interim financial statements for the nine months ended Sep. 30, 2023 have been prepared in accordance with International Financial Reporting Standard: IAS 34 Interim Financial Reporting, and should be read in conjunction with the annual financial statements for the year ended Dec. 31, 2022.

The accounting policies adopted are consistent with those used in the Bank’s annual financial statements for the year ended Dec. 31, 2022.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in its process of applying the Bank’s accounting policies. The financial statements have been prepared on a going concern basis.

 

5

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

B

Accounting Policies

 

B2

New accounting pronouncements

The new accounting pronouncements, amendments and interpretations issued during the nine months ended Sep. 30, 2023, do not have any significant impact on the operating results, financial position and comprehensive income of the Bank, based on the assessment of the Bank.

 

B3

Comparatives

The comparative date of the Condensed Statement of Financial Position is as at Dec. 31, 2022, while the comparative period of the Condensed Statement of Comprehensive Income, the Condensed Statement of Changes in Equity and the Condensed Statement of Cash Flows are from Jan. 1, 2022 to Sep. 30, 2022.

 

6

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

C

Disclosure Notes

 

C1

Interest income and expense

 

⁽¹⁾ Interest income for loan investments includes amortization of front-end fees, and other incremental and directly related costs in relation to loan origination that are an integral part of the effective interest rate of those loans.

⁽²⁾ Interest expense is accrued mainly based on the notional coupon rate. However, the Bank uses derivatives to manage interest rate and foreign currency risks, and hence, the actual borrowing cost for the Bank is swapped from fixed to floating rate. The hedging results are presented in Note C14 Derivatives.

 

C2

Net fee and commission income

 

⁽¹⁾ According to the Governing Instrument of the Finance Facility of the Multilateral Cooperation Center for Development Finance (“MCDF Finance Facility”) and the agreement on the terms and conditions of service as the administrator of the MCDF Finance Facility, AIIB provides administrative and financial services to the MCDF Finance Facility, including hosting of the secretariat of the Multilateral Cooperation Center for Development Finance (“MCDF”). Therefore, the Bank charges an administration fee for the services provided as the administrator of the MCDF Finance Facility. The MCDF serves as a multilateral initiative to foster high-quality infrastructure and connectivity investments in developing countries.

⁽²⁾ Implementing entity refers to AIIB’s role as either implementing partner, technical partner, or another analogous role, in a multilateral partnership facility.

 

7

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

C

Disclosure Notes

 

C3

Net gain on financial instruments measured at fair value through profit or loss

 

 

C4

Impairment provision

 

 

C5

General and administrative expenses

 

Refer to Note C20 for details of key management remuneration.

 

8

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

C

Disclosure Notes

 

C6

Cash, cash equivalents, and deposits with banks

 

 

(1)

USD58.09 million of demand deposits is segregated for the externally managed portfolios (Dec. 31, 2022: USD73.15 million).

 

(2)

Money Market Funds

 

Money Market Funds (“MMFs”) are rated triple-A equivalent and invest in a diversified portfolio of short-term high-quality assets. The objective of the investment is only to meet short-term cash commitments. The MMFs are subject to an insignificant risk of changes in value, with daily liquidity and an investment return comparable to normal USD denominated money market interest rates. The MMFs are exposed to credit, market and liquidity risks, and are measured at fair value.

 

(3)

Term deposits with initial maturity more than three months have maturities up to 24 months. As at Sep. 30, 2023, USD3.2 billion of term deposits has remaining maturity within 12 months (Dec. 31, 2022: USD6.67 billion).

 

9

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

C

Disclosure Notes

 

C7

Investments at fair value through profit or loss

 

Analysis of investments at fair value through profit or loss:

 

 

(a)

The Bank has engaged external asset managers to invest in portfolios of high credit quality securities (the “External Managers Program”). The portfolios are fair value measured and securities are eligible for sale. The following table sets out the amounts of the investment portfolio by asset categories.

 

 

10

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

C

Disclosure Notes

 

C7

Investments at fair value through profit or loss (Continued)

 

(b)

The Bank invests in bond securities which are actively managed. The bond investments are measured at fair value through profit or loss. The bonds invested are mainly of high credit quality. The Bank also invests in securities for infrastructure and development purposes in its investment operations portfolio.

 

(c)

The Bank invests in certificates of deposit and commercial papers which are actively managed within treasury investment portfolio and measured at fair value through profit or loss. The certificates of deposit and commercial papers are of high credit quality.

 

(d)

The Bank has engaged external asset managers to invest in a fixed-income portfolio. The objective of this portfolio is to develop the climate bond markets in Asia, composing of labeled green bonds and unlabeled climate-aligned bonds. The investment strategy targets climate bond issuers who rate high on the evaluation of three dimensions related to the Paris Agreement: (a) climate mitigation, (b) climate adaptation and (c) contribution to the transition to a low carbon, climate resilient economy.

 

(e)

The Bank invests in limited partnership funds (“LP Funds”), trust and others. LP Funds are managed by the general partners, who manage all investments on behalf of the limited partners. The Bank, along with other investors, has entered into the LP Funds as a limited partner. The trust is managed by investment manager who makes investment decisions on behalf of the trust as per the trust deed and the investment management agreement. The investment in funds, trusts and others do not have an expected maturity date within twelve months.

 

11

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

C

Disclosure Notes

 

C8

Loan investments, loan commitments and related ECL allowance

 

Loan investments are carried at amortized cost. At initial recognition, loan investments are measured at fair value using the assumptions market participants of either sovereign-backed or nonsovereign-backed projects would use when pricing the loan assets. The market where the Bank enters into such transactions is considered to be the principal market. The transaction price normally represents the fair value of loans at their initial recognition.

All sovereign-backed loans to eligible members are subject to the same pricing, taking into account the “preferred creditor status” and other terms giving the Bank rights more favorable than those available to commercial creditors. The Bank applies commercial pricing practices to nonsovereign-backed loans. The Bank has no intention to sell sovereign-backed loans, nor does it believe there is a secondary market for such loans.

The Bank began offering variable spread loans in 2019 where the lending rate consists of a variable reference rate and a variable spread. The variable spread consists of a fixed contractual lending spread and maturity premium along with a variable borrowing cost margin. The reference rate and the borrowing cost margin are determined at each interest rate reset date and are applicable for the following six months. The borrowing cost margin is based on the cost of the underlying funding for these loans at the time of the reset. As at Sep. 30, 2023, USD12,961.97 million of the total carrying amount of the Bank’s loans are variable spread loans (Dec. 31, 2022: USD10,887.26 million).

As at Sep. 30, 2023, USD1,245.87 million of the total carrying amount matures within 12 months (Dec. 31, 2022, USD618.65 million).

The following table sets out overall information about the credit quality of loan investments and loan commitments issued for effective contracts as at Sep. 30, 2023. The gross amounts of loans are net of the transaction costs and fees that are capitalized through the effective interest method, or EIR method.

 

 

12

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

C

Disclosure Notes

 

C8

Loan investments, loan commitments and related ECL allowance (Continued)

 

(a)

As at Sep. 30, 2023, the total ECL allowance related to loan commitments is USD0.79 million (Dec. 31, 2022: USD1.28 million), and is presented as a provision in Note C15.

For the nine months ended Sep. 30, 2023, the impairment losses on loan investments and loan commitments were USD11.59 million (for the nine months ended Sep. 30, 2022: USD150.07 million), as disclosed in Note C4.

 

C9

Bond investments at amortized cost

 

 

(a)

In Sep. 2021, the Bank engaged an external asset manager to invest in a portfolio of high credit quality securities. The portfolio adopts a hold-to-maturity business strategy. The bonds are initially recognized at fair value and subsequently measured at amortized cost.

 

(b)

In April 2022, the Bank started an internally managed portfolio to invest in high credit quality securities. The portfolio adopts a hold-to-maturity business strategy. The bonds are initially recognized at fair value and subsequently measured at amortized cost.

 

(c)

The Bank has invested in a fixed income bond investment portfolio which comprises Asian infrastructure-related bonds and other private bond investment. The bonds are initially recognized at fair value and subsequently measured at amortized cost.

For the nine months ended Sep. 30, 2023, USD4.41 million investment loss was recognized as a result of disposal of certain bonds in the portfolios (for the nine months ended Sep. 30, 2022: USD13.17 million).

Bond investments at amortized cost are subject to credit losses estimated by applying an ECL model, assessed on a forward-looking basis. As at Sep. 30, 2023, ECL allowance of USD14.49 million and USD0.59 million has been provided respectively to bonds in investment operations and treasury investment portfolio (ECL allowance of USD12.93 million has been provided to bonds in investment operations as at Dec. 31, 2022).

As at Sep. 30, 2023, USD2,401.70 million of the gross carrying amount matures within 12 months (Dec. 31, 2022: USD12.59 million).

 

13

Asian Infrastructure Investment Bank

Notes to the Condensed Financial Statements

For the nine months ended Sep. 30, 2023

(All amounts in thousands of US Dollars unless otherwise stated)

 

C

Disclosure Notes

 

C10

Investment in associate

On April 2, 2020, the Bank subscribed for a 30% economic interest in a private company incorporated in Singapore and limited by shares. The purpose of the investee is to acquire and securitize infrastructure loans. As at Sep. 30, 2023, the undrawn capital commitment is nil (as at Dec. 31, 2022: USD6 million).

For the nine months ended Sep. 30, 2023, the associate recognized a profit of USD11.0 million (for the year ended Dec. 31, 2022: profit of USD6.1 million). The Bank has recorded a net profit of USD3.3 million following the equity method (for the year ended Dec. 31, 2022: net profit of USD1.8 million).

 

 

C11

Paid-in capital receivables

According to the AOA, payments for paid-in capital (refer to Note C16) are due in five installments, with the exception of members considered as less developed countries, who may pay in ten installments. Paid-in capital receivables represent amounts due from members in respect of paid-in capital. These amounts are initially recognized at fair value and subsequently measured at amortized cost. The fair value discount is accreted through income using the effective interest method. For the nine months ended Sep. 30, 2023, none of discount (for the nine months ended Sep. 30, 2022: USD1.16 million) has been debited to the reserve. An amount of USD1.02 million (for the nine months ended Sep. 30, 2022: USD1.87 million) has been accreted through income in the current period.

As at Sep. 30, 2023, overdue contractual undiscounted paid-in capital receivables amounting to USD198.55 million (Dec. 31, 2022: USD214.06 million) (Note C16) are not considered impaired.

 

14