Photo’s source: www.aiib.org

On March 1^st, 2022, the Asian Infrastructure Investment Bank (AIIB) said in a statement that it will suspend business related to Russia and Belarus. The bank declared that: “in the best interests of the bank, management has decided that all activities relating to Russia and Belarus are on hold and under review“.

AIIB was launched in 2016 to counter the West’s dominance of the World Bank and the International Monetary Fund. The AIIB has 105 members. Russia joined in December 2015 shortly before its launch, and Belarus in January 2019.

China is the largest stakeholder in the multilateral institution, with almost 27% voting power. Russia is also among the AIIB’s founding members and holds around a 6 % vote in its operations, the third-biggest after China and India. Russia also holds a seat on the bank’s board of directors.

The AIIB said it was “actively monitoring the situation” in Ukraine and that management would do the “utmost to safeguard the financial integrity” of the group.

The New Development Bank, created by Brazil, Russia, India, China and South Africa to fund infrastructure projects announced also on Thursday that it would put new transactions in Russia on hold, citing “unfolding uncertainties and restrictions”.

The moves by the two development banks follow recent steps by China’s largest state-owned banks to restrict financing for purchases of Russian commodities.

According to the bank’s website, the AIIB has two approved projects in Russia with total loans of $800 million. One of the loan facilities was extended to the Russian government to “improve road network connectivity in key economic corridors.” The other was meant for replenishing working capital of rail transportation service provider Russian Railways JSC due to Covid-19 impact.

“AIIB stands ready to extend financing flexibly and quickly and support members who have been adversely impacted by the war, directly or indirectly” AIIB said.

This article was edited using the data from the Asia.nikkei.com, Aljazeera.com, Reuters.com, English.aawsat.com, Bloomberg.com and Aiib.org