SINGAPORE - Infrastructure is critical in spurring economic growth and the Asian Infrastructure Investment Bank (AIIB) is a significant initiative in advancing infrastructure development and connectivity in the region, Finance Minister Heng Swee Keat said.

Mr Heng was at the inaugural board of governors' meeting session in Beijing on Saturday (Jan 16).

The AIIB is an initiative spearheaded by China that aims to invest and facilitate investments in infrastructure projects in this part of the world. Singapore is one of the founding members.

Mr Heng also outlined four ways that the bank could foster economic and social development in Asia.

Firstly, the bank can "help to strengthen the capabilities of policymakers in the region, so that they are better able to structure projects to make this viable and to maximise the economic and social impact that are bankable".

Public officials need to be better equipped to manage complex projects and project risks, Mr Heng said.

Secondly, the bank could "make concerted efforts to leverage its financing and crowd in funding from the private sector as co-investments." Mr Heng said that the benefits of private sector involvement go beyond the mere provision of funds and can also contribute much-valued market expertise and proper financial discipline to infrastructure projects.

A third suggestion he made is that the AIIB could contribute to strengthening and mainstreaming the existing infrastructure financing landscape. He called on the bank to explore innovative mechanisms to spur the development of infrastructure as an asset class.

Fourthly, the bank could actively collaborate with other multilateral institutions such as the World Bank and Asian Development Bank to promote sustained growth in Asia and set high standards in governance, procurement, environmental and social safeguards.

Mr Heng is in Beijing for the ceremonies and meetings to mark the setting up of the AIIB.

He also met his Chinese counterpart, Finance Minister Lou Jiwei. They discussed a wide range of issues on the structural challenges that both economies face and how they can cooperate closely on regional and global financial stability. Mr Heng added that he also met up with ministers and officials from several Asian countries.

In his Facebook posting on Saturday evening, Mr Heng added that Chinese government had put in a lot of thought and effort in organising the ceremonies, where both President Xi Jinping and Premier Li Keqiang officiated, "showing the importance of the AIIB". He also thanked all the officials and the staff.