SHANGHAI - The China-backed Asian Infrastructure Investment Bank (AIIB) has become the first international development institution to issue sustainable development Panda bonds in the country's interbank market, state news agency Xinhua reported on Wednesday.

AIIB, a multilateral development bank headquartered in Beijing, issued 1.5 billion yuan ($224 million) of 3-year bonds with a coupon of 2.4%, with proceeds to be used for "sustainable development infrastructure construction," Xinhua reported.

In November, China announced a pilot scheme to allow foreign issuers to issue social and sustainable development Panda bonds in the interbank market.

Panda bonds are yuan-denominated bonds issued by foreign borrowers.

($1 = 6.6883 Chinese yuan renminbi) (Reporting by Andrew Galbraith Editing by Mark Potter)