WASHINGTON (Reuters) - The World Bank will likely take the lead on initial projects jointly financed with China's new Asian Infrastructure and Investment Bank, the head of the Washington-based multilateral lender said on Thursday.
The two institutions on Wednesday signed a framework agreement to co-finance projects, and the World Bank said they were currently discussing nearly a dozen projects in sectors that include transport, water and energy in Central Asia, South Asia and East Asia.
AIIB, which was formally launched in January, expects to approve $1.2 billion in financing this year. The World Bank said joint projects will account for a sizeable share of that amount.
World Bank President Jim Yong Kim told reporters on Thursday that such financing projects require a massive amount of up-front preparation work, and the AIIB is still building up its capabilities.
"The AIIB is only now increasing their staff. So likely, the first projects will be that we do all of that project preparation, we do all the work that requires huge amounts of staff in a large and institutional infrastructure, and then they will simply co-finance," Kim said.
He said no decisions have been made on specific projects to jointly finance with the AIIB.
He noted that under the framework agreement, the jointly financed projects will use the World Bank's policies and procedures in areas such as procurement, environment and social safeguards.
The AIIB is expected to lend $10 billion to $15 billion annually within the first five or six years of operations.
The new bank, which signals China's growing economic clout, will provide an alternative to the World Bank and other Western-dominated multilateral investment banks.
Despite opposition from Washington, U.S. allies including Australia, Britain, German, Italy, the Philippines and South Korea have agreed to join the AIIB.
(Reporting by David Lawder; Editing by Paul Simao)