He and the AIIB's president-in-waiting Jin Liqun (a former vice-president at the ADB) held formal talks in May and reached agreement on several points.
"We agreed on the importance of infrastructure in economic development and also social development and poverty reduction," Nakao told the Herald.
"We agreed that we need more financing for infrastructure in Asia.
"We agreed that the safeguard for social and economic impact is very important for infrastructure building.
"We also agreed that we can collaborate, including co-financing projects.
"In short, we need financing for infrastructure more than less, so it's nice to have such a player and we can co-finance, we can collaborate."
The AIIB is yet to get going properly, so it is not possible to compare the theory of co-operation with the practice. However Nakao said there was no need for the ADB to be more proactive, because it was already proactive.
It had offices in 26 countries and was close to discussions by government authorities about development strategies.
It sometimes initiated discussion on what the focus should be, and had 12 executive directors giving guidance on development issues.
Yes, the bank loaned money, but capacity building and technical assistance had also been important in its work over 50 years in sectors such as energy and agriculture.
"It starts not from lending, but it starts from planning, the strategy part," he said.
But Nakao makes one concession about the advent of the AIIB. "There will be incentives for us to do better because there is a new player, to speed up our processes and to enhance more efficiency."
New Zealand is a founding member of both banks - the ADB since 1966 and the AIIB since June, when Finance Minister Bill English flew to Beijing for the signing ceremony. Among the ADB success stories are South Korea and Singapore. India is now its biggest borrower.
The ADB is aligned to Japan and the United States - its president is always nominated by the Japanese Government - and the AIIB was born of China's frustration that it wasn't getting the recognition due to it in multilateral banking institutions.
The ADB has begun its own reforms under Nakao, but he said those began well before the AIIB had been suggested. He gained approval this year to restructure the bank's balance sheet, enhance its leverage and increase its annual loans and grants by up to 40 per cent, to take effect from 2017.
Last year it established an office within the bank to give advice on how to set up Public Private Partnerships.
"Even before the PPP office was established, we established drafting PPP law for Vietnam, having new PPP offices in countries like the Philippines and Indonesia and we are supporting the TAPI (Turkmenistan, Afghanistan, Pakistan and India) natural gas pipeline project, which is a PPP."
The bank has also expanded its work beyond traditional infrastructure projects to health and education and environmental improvement. However the ADB has a reputation for being very bureaucratic, slow and deliberate in its decision making and better attuned to dealing with Asia than with the Pacific.
China is the ADB's second largest borrower - with loans totalling US$31.58 billion ($49.58 billion) since 1986 and US$1.5 billion last year - despite being classed as an upper-middle income country.
Nakao said the ADB's advice in particular could still have an impact on reforms in China. "The US$1.5 billion of operations in China is a very small amount compared to the huge needs of finance for China.
"But still China wants to keep borrowing from us because the combination of our policy advice and some capacity building and lending is a really good tool for them to convince local authorities and state-owned enterprises to make reforms."
He has no serious concerns about the recent sharemarket turmoil in China. While China was heading for more moderate growth, he believed it still had the capacity to continue to grow to catch up to advanced economies. It had more market-based reforms, including financial sector reform, local government finance reform, state-owned enterprise reform and its fiscal position was strong.
"If there is a need for stimulus, there is much room in fiscal and monetary policies because the fiscal conditions are very sound and interest rates are still high so there is still room to stimulate the economy."
Takehiko Nakao
• President, Asian Development Bank
• Born 1956
• ADB president since April 2013
• Held senior positions in Japan's Ministry of Finance
• Has been top Japanese finance official at G7 and G20 meetings
• Oversaw Japan's huge currency market interventions in 2011 to lower the yen
Asian Development Bank
• Aims to reduce poverty and improve lives in Asia and the Pacific
• Provides loans, grants and technical assistance to developing member countries
• HQ in Manila, the Philippines
• 67 member countries. Major shareholders are Japan and the US
• Almost 3000 staff
• Authorised capital: US$153b (paid-in US$7.7b; callable capital US$145.4b)
• Annual loan approval: US$13.1b (2014)
• Loans outstanding: US$83.4b
• Top loan recipients: India, China, Pakistan, Vietnam, Philippines
• New Zealand was a founder member in 1966
• NZ shareholding: 1.543% of total shares
• NZ Votes: 1.533% of total membership
• NZ's overall capital subscription: US$2.36b
• NZ's paid-in capital subscription: US$118.07m
McCully's message to the bank
Foreign Affairs Minister Murray McCully has a message for the Asian Development Bank - remember the small countries and move more quickly.
New Zealand's annual $10 million contribution to the Asian Development Fund, run by the bank, comes out of its aid budget.
And New Zealand undertakes larger development projects in Asia and the Pacific with partners such as the ADB or the World Bank.
McCully and ADB president Takehiko Nakao met on Monday. The minister, who is not known for his patience with slow bureaucracy, said he had been trying unsuccessfully to get the big bank to change the way it operates in the Pacific and work more quickly.
"I'm always very keen to talk to the senior leadership of the Asian Development Bank because they operate in two quite distinct spheres," he said.
"They do big projects in Asia and they undertake a range of projects in the Pacific that tend to be very small, but they apply the same rulebook to both, which means we've a very compliance-heavy approach in dealing with what are pretty small projects in the Pacific.
"I've been looking to trying to persuade them that they should have a faster response mechanism in the Pacific and that they should also be maintaining a good share of their total book in the Pacific - that they shouldn't forget about the small countries in our region." McCully said Nakao was very receptive.
"He undertook to look very seriously at the issues we raised."
