Private sector engagement is increasingly recognized as vital in financing global connectivity projects, a sentiment reinforced during the recent Asian Infrastructure Investment Bank (AIIB) Annual Meeting. This collaboration is pivotal in fostering economic resilience in the face of rising uncertainties.

Financial experts and officials underscored that encouraging private sector investment in cross-border infrastructure is essential to advance inclusive and sustainable global development. As outlined on Wednesday, this initiative aims to address various challenges stemming from escalating global issues.

At the 10th Annual Meeting of the AIIB's Board of Governors, Finance Minister Lan Fo'an highlighted that numerous developing nations are grappling with funding shortages for cross-border connectivity projects. This predicament is exacerbated by constrained public resources amid sluggish global economic conditions and decreasing international development aid.

Lan emphasized that effectively mobilizing private sector capital is crucial to mitigating the insufficient public funding bottleneck. He asserted that this private investment can significantly bolster connectivity initiatives.

Further, Lan expressed China's readiness to collaborate with all stakeholders to enhance the AIIB's proactive role in fostering private sector investment in cross-border connectivity projects. He reiterated the importance of this effort in furthering global sustainable development.

The finance minister also pointed to the potential for the AIIB to advance the alignment of regulations and standards among its members, innovating financing methods, and improving various financial tools, including local currency financing. These measures could help alleviate private investors' concerns regarding geopolitical risks and sovereign debt defaults.

AIIB President Jin Liqun noted that while the bank's current focus is largely on transportation infrastructure, it is progressively exploring less traditional areas of connectivity. This includes financial platforms for cross-border trade and energy market transmission lines.

Jin remarked that infrastructure must be viewed through a broader lens reflective of the evolving artificial intelligence era. He assured private investors that their contributions would be well-governed and allocated towards high-quality assets.

Supporting this collaborative spirit, Jin referenced a Chinese proverb emphasizing collective effort: "When everyone gathers firewood, the flames will go on." This underscores the importance of concerted action among stakeholders.

Data from the AIIB indicates that its cross-border connectivity projects constituted 33 percent of its annual portfolio in 2024, significantly enhancing Asia-Pacific connectivity and fostering economic cooperation with other regions.

Rodrigo Salvado, the director-general of the AIIB's Operational Partnership Department, shared insights at the conference regarding the bank's strategy to attract more private sector financing. This includes utilizing financial instruments such as insurance and warranties to mitigate investment risks.

In addition, the AIIB aims to prioritize upstream investments, laying a robust foundation for viable development projects. Lan remarked that China is enhancing its legal framework to encourage private sector involvement in infrastructure investment and construction, particularly in cross-border connectivity.