The Asian Infrastructure Investment Bank printed more than US$5bn-equivalent of public market bonds across US dollars, euros, renminbi, Australian dollars and Hong Kong dollars in 2025, and is planning to reach more investors next year.
The Beijing-headquartered multilateral development bank was founded in 2016 with a mission to finance sustainable infrastructure, and on November 20 approved Colombia’s membership application, which will bring its members to 111.
The Triple A rated MDB approved US$8.4bn of project financing for 51 projects in 2025 and is still in the early stages of deploying its US$100bn of capital.
“We do about US$10bn a year in funding, but we are still in the ramp-up phase,” said Dominico Nardelli, the treasurer and acting chief financial officer of the AIIB following the departure of Andrew Cross from the CFO role this month.
“We have US$68bn of total assets, of which US$30bn is liquid assets in the bank treasury, which means we have ample capital to continue to grow and don't forecast reaching full balance sheet capacity until the mid 2030s. We want to deploy at least another US$75bn of investments between now and 2030.”
While the AIIB is not focused on poverty reduction or concessional lending, unlike some other MDBs, it does have a concessional fund, separate from the balance sheet and funded by donors, to subsidise loans to low-income countries. It has already received commitments of over US$300m.
“We would approve a loan on the same terms as everyone else, but the fund provides eligible countries with an interest rate buy-down to make the loan more affordable,” said Nardelli.
On the funding side, the AIIB needs to make careful decisions about where it raises funds.
“We intend to issue a Panda next year,” said Darren Stipe, lead treasury officer and head of funding. “We would like to reach anyone offshore who is already buying Chinese government bonds. In Singapore there is a lot of interest in Pandas.”
Stipe said the main question potential Panda investors have is whether there is enough secondary liquidity.
“Some issuers in the Panda market price aggressively,” said Stipe. “You can do that if you rely on a small set of investors, usually underwriters. That shows up in secondary liquidity where the result will be relatively fewer flows. In contrast, AIIB has tried hard to discover the real market clearing price.”
It has also been engaging with investors in China, who are mainly focused on yield, unlike overseas accounts that are driven by asset swaps.
“We have done a lot of work on investor marketing to build expectations about pricing behaviour,” said Nardelli.
“We have started to involve second-tier provincial names. China is a huge country, so it involves a lot of marketing.”
The AIIB recently started issuing callable notes, typically with a 10-year final maturity and callable after two or three years, which accounted for US$1bn of its US$10bn debt raising.
“Most of the demand has been from Asian investors, who like callables because there is a yield pickup,” said Stipe. “We basically sell volatility back to the placing agent.”
Having opened the Wonton bond market – Hong Kong dollar bonds issued by foreign entities – with its debut trade earlier this year, the AIIB is already planning next year’s issues in regional currencies.
Its HK$4bn (US$514m) three-year issue in February was the first public deal in Hong Kong dollars by an international issuer, adding new life to a market that was essentially for private placements only, and Stipe said the AIIB intends to continue the momentum with another deal in 2026.
AIIB was also one of the early issuers of a digital bond, with the first issue of a digitally native bond on Euroclear’s Digital Financial Market Infrastructure platform. The US$300m bond was issued in August 2024 and matures in January 2027, raising the possibility that AIIB could issue again next year to refinance it.
“It would be a shame not to have a digital bond outstanding,” said Stipe. “Investors had to do a lot of work, particularly to find out what is their legal recourse. Investors who have done that work wouldn’t have to do it again if AIIB issues on the same platform. We would love to see more Triple A issues, because that keeps investors incentivised to look at digital bonds.”
The AIIB sold a A$500m (US$323m) climate adaptation bond in January and is likely to make an annual visit to the Australian dollar market, despite skipping it in 2024 when swaps made issuance there less advantageous.
In January 2024 the African Development Bank issued the first hybrid capital instrument from an MDB. As the instrument counts towards equity it allows MDBs to fund themselves while maintaining their credit ratings, but MDB hybrids have divided opinion, since they pay yields too low to attract a broad base of investors, while some are not allowed by their mandates to buy hybrids.
AIIB has no need to think about hybrid issuance in the medium-term, but Stipe still welcomes the development of the instrument.
“It’s probably seven to 10 years before we start to bump up against capital constraints,” he said. “We would like to see hybrids succeed because it’s a product we may turn to down the road.”