Indonesia is seeking the first loan from Asian Infrastructure Investment Bank (AIIB), as the China-led institution vies with the World Bank to fund projects in South-east Asia.

The AIIB's funding approvals will be faster than the World Bank's and so it may put pressure on other multilateral lenders, Mr Luky Eko Wuryanto, a deputy minister at Indonesia's coordinating economic ministry, told a conference in Singapore yesterday.

Competition for the first loan will come from the Philippines, Vietnam and India, he said.

"They are really promising us that the process for the loan approval will be not as long as the World Bank's," Mr Wuryanto said. "We are really seeking the country (to) be first to get the loan from the AIIB. So obviously we are excited."

The AIIB is part of China's efforts to boost its influence in Asia, where development funding has come from institutions such as the US-led World Bank and the Japan-steered Asian Development Bank for decades.

Indonesia, which needs around US$450 billion (S$633 billion) to overhaul its transport network and power supply, received a commitment of as much as US$11 billion in loans over the next few years from the World Bank in May.

The AIIB hopes to be formally established by the end of the year, and it is still not clear when it will begin lending. With capital of US$100 billion, it will be ready to fund infrastructure projects starting in January, according to Indonesia's Finance Minister Bambang Brodjonegoro.

Indonesia will be one of 57 founding countries and will invest US$672 million over five years, making it the eighth-largest investor in the institution.

The AIIB has told Indonesia it will have funding most readily available for gas projects, with coal plants to be funded later on, Mr Wuryanto said.

BLOOMBERG