The Asian Infrastructure Investment Bank (AIIB) headquarters in Beijing, China. Image by AIIB.
Key Points:
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The AIIB will launch its fourth climate adaptation bond next year, following AUD$1.5bn ($1.07bn) raised across three previous offerings.
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AIIB favours the Australian market because its benchmark trade sizes match eligible assets, evidenced by its recent AUD$500m bond being 4.6 times oversubscribed.
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The bond addresses a stark regional shortfall, as Asia receives only around $19bn of its required $200bn+ in annual climate adaptation financing.
The Asian Infrastructure Investment Bank (AIIB) plans to return to the bond market next year with its fourth issuance dedicated to climate adaptation projects in developing countries.
The Beijing-based multilateral development bank pioneered the region’s first climate adaptation bond in 2023 and has since raised a total of AUD$1.5bn (US$1.07bn) through three offerings.
The announcement comes after the AIIB’s latest AUD$500m climate adaptation bond in February was 4.6 times oversubscribed by over 40 investors and was priced 16 basis points tighter compared to its last adaptation bond offering in 2025.
“We’ll be issuing more climate adaptation bonds. We look forward to being back in the market in 2027,” AIIB’s head of funding Darren Stipe said at a conference jointly organised with the Hong Kong Monetary Authority during Hong Kong Green Week.
“That [Australian] market has worked for us because it is right-sized. The size of a benchmark trade is right-sized to the amount of eligible assets that we have,” he said.
Asked whether AIIB plans to return to the Australian bond market for the upcoming climate adaptation issuance, Stipe told Green Central Banking that the bank “would consider returning to the market in a similar format” if investor demand remains.
He declined to comment on the potential issuance size or tenor, stating that they would “depend on market conditions and the availability of eligible projects in the pipeline.”
The proceeds from the five-year bonds are allocated to projects where at least 20% of total project financing goes towards climate adaptation activities. The bank’s portfolio includes water and electricity infrastructure development in India, flood recovery in China, climate policy reforms in Bangladesh and road reconstruction in earthquake-affected areas in Türkiye.
In 2025, AIIB’s climate finance investment totalled US$7.5bn accounting for 71% of the bank’s approved regular financing, with 27% (roughly US$2bn) directed to adaptation projects.
Asia is estimated to need more than US$200bn annually for climate resilience, but current financing flows stand at about US$19bn.
Addressing the region’s adaptation finance shortfall, Stipe said that it tends to be more challenging to translate resilience into financial value.
“It’s a little bit harder to do in some cases than a traditional infrastructure project. If you’re making a water system more resilient, what’s the financial return you’re getting off the back of that? It’s much harder to identify.”
AIIB bases its definition of climate adaptation on the joint methodology for tracking climate change adaptation finance developed by multilateral development banks (MDBs), including the Asian Development Bank and World Bank, as well as the common principles for climate change adaptation finance tracking, agreed by MDBS and the International Development Finance Club (IDFC) in 2015.
The bank has stressed that it follows a “rigid climate-resilience criteria, requiring robust climate risk identification, assessment and management”, which are detailed in AIIB’s methodology for assessing the alignment of its investments with the Paris Agreement published in 2023.
Stipe said consensus on the definition of climate adaptation is important for standardisation and market efficiency.
“You see it in securitisation markets, for example. The more standardised you can become, the more efficient the market is able to be. As a leader in issuing climate adaptation bonds, we’re really going for that measurable and consistent approach, but also… adhering to principles.”
The AIIB also plans to update its sustainable development bond framework this year, said Stipe.
First published in 2021, the updated framework will be more closely aligned to the International Capital Market Association (ICMA) principles, setting out the eligibility criteria for projects more explicitly and making reporting more structured and consistent, he said.
This page was last updated September 17, 2026
Written by
Gabrielle See is an award-winning journalist based in Singapore who has written for Green Central Banking since 2025. She has covered the intersections of finance, geopolitics and energy transition in Asia over the past five years for regional and international publications, including CNBC, Eco-Business, Southeast Asia Globe and the Business Times.
