Asian Development Bank will cooperate rather than compete with China-led AIIB as the region's infrastructure requires "massive" funding, ADB President Takehiko Nakao said today.
Speaking at a news conference to kick off the bank's annual meeting, he said there is a massive need for infrastructure spending in Asia and ADB and AIIB can cooperate by co-financing good projects together.
ADB and AIIB agreed to co-finance three projects -- two last year and one this year, he said. The two projects co- financed are among the 12 that AIIB has approved since 2016.
Japan and the US did not join the USD 100-billion China- backed Asian Infrastructure Investment Bank (AIIB), which now has 70 approved members.
"We (ADB) don't have members from Latin America or from Africa or Middle Eastern countries. We are not competing for members (with AIIB) but we can cooperate with AIIB because they are focusing on infrastructure building in a linear system and we are also supporting infrastructure," Nakao said.
ADB, he said, is doing policy based lending and social sector support in addition to infrastructure.
"So we have different kinds of objectives and different ideas of management. I had nine discussions with (AIIB) President Jin (Liqun) in last two years to discuss co- financing projects.
"We agreed to three projects, two last year, one this year and we also discussed how we can use local currency for co-financing. So, there are many areas in common where we can cooperate," he said.
Nakao said about 70 per cent of ADB's lending is in infrastructure.
"If you include China and India, ADB support 3 per cent of infrastructure financing. The financing need is so large that we don't need to regard them (AIIB) as rival.
"In this regard, because there is a very large piece of financing, so we can cooperate. I don't think we need to change our business model.
"We will continue to support social sector besides infrastructure," he added.
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