(Yicai Global) Oct. 27 -- Strengthening regional cooperation and connectivity is essential to enhancing business certainty to revitalize the global economy, according to the president of the Asian Infrastructure Investment Bank.

“In an era when the world is becoming more divided, it is necessary to promote multilateral cooperation and contribute to global governance through joint efforts with the international community,” Jin Liqun said at the multilateral development bank's 2022 annual meeting yesterday.

In order to further improve the AIIB’s response to the needs of different members, the bank is setting up an overseas office in Abu Dhabi, the United Arab Emirates, Jin said.

Although developing Asia's economic growth is expected to be 5.2 percent in 2023, the sustainability of debt in several AIIB member countries is at a greater risk than ever due to the shrinking fiscal space, global monetary tightening, and capital outflows from emerging and developing economies, Jin said. Managing debt levels and fiscal pressures will remain challenging for many economies, affecting public infrastructure expenditures, he added.

The chief of the financier of economic and social development in Asia pointed out that in the context of fiscal austerity, achieving climate commitments will require more long-term financing. "Despite the funds to tackle climate change, we need to do a lot more." Green bonds account for less than 1 percent of the total capital traded in global markets, Jin said. "The only way to improve climate-related financing available is to take a multilateral approach that creates demand, secures supply, and ultimately gives rise to the innovation we need to avoid the threat of climate change."

In 2021, the AIIB’s climate financing totaled USD2.9 billion, accounting for 48 percent of the total, up from 41 percent in 2020. The institution has committed to having its climate financing account for at least 50 percent of the total by 2025.

The AIIB, which has over 100 members, provides project owners access to international financing. It has 191 projects and a USD36.4 billion portfolio in 33 countries and territories.

Editor: Emmi Laine, Xiao Yi