The Asian Development Bank has approved a $100 million loan for a highway project in Pakistan, marking its first co-financing with the China-led Asian Infrastructure Investment Bank.

The Manila-based ADB announced Friday that AIIB will provide the loan subject to its board's approval later this month. The United Kingdom's Department of International Development is extending a $34 million grant, with ADB serving as lead financier and administrator for the AIIB loan and the grant. AIIB is viewed by some as a rival to the U.S.-led World Bank and the Japan-led ADB, with suspicions China may use it to advance its economic and political interests.

ADB President Takehiko Nakao called the co-financing "a historic milestone" for the ADB and AIIB as they work to meet Asia's pressing infrastructure needs.