"The AIIB and the ERDF would share the risk of the losses of the project portfolio. The ERDF risk would be ring-fenced and its participation therefore capped at an agreed annual budgetary amount.

"The ERDF would be covering the residual risk up to its maximum exposure on any individual transaction. The risk-taking of the AIIB on the other hand, would be compensated via a risk premium charged up front to the project entity at the time of agreement.

"This premium will be priced to reflect the subordinated status of the credit line and the associated risks for the ERDF as well as covering expected management and other costs," Bovis said.

Chakrabarti said that because both the EBRD and the AIIB have similar financing structures and goals, they can jointly invest in projects and share revenue based on percentage shares. In addition to debt financing, he said, the two banks can also work together on equity financing.

In particular, opportunities exist in the municipal infrastructure investment sector－for example, in waste, water management, public transportation and street lighting, Chakrabarti said.

"Equity investment, in our view, will allow us to use our expertise to help a company become more comfortable and effective on the ground. As an equity investor, we would typically have a position on the board of a company, and we can then cooperate with the company to make it better," he said.