AIIB to give India $200 million for road, energy and infrastructure

The two-day annual meeting of the Asian Infrastructure Investment Bank (AIIB) is set to begin in Mumbai on June 25.

“Most banks like ADB and World Bank were set up by the advanced economies and were the principal contributors of the capital,” Department of Economic Affairs Secretary Subash Chandra Garg said. 

In contrast, 75 per cent of the capital at the AIIB has been contributed by Asian economies. 

While China is the main stakeholder in the bank with 31 per cent shareholding, India is the second largest with 8.7 per cent. India is the largest beneficiary of funding from the bank, which has reached $1.2 billion. 

The funding has gone towards six major projects in Andhra Pradesh and Maharashtra, for example, towards building rural roads, rails and access to electricity. 

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“The basic objective of setting up such multilateral banks is to mobilise capital, leverage it in the market, raise resource and multiply them, and provide funding at much lower rates to borrowers,” according to Garg. 

The AIIB is headquartered in Beijing and was founded in January 2016 by 57 member-countries. It now has 86 member countries. The lender focuses on funding sustainable infrastructure projects in areas such as transportation, energy, and water and waste management.  

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Danny Alexander, vice-president and corporate secretary at AIIB, said: “Our mission is to improve social and economic outcomes in Asia and beyond, to invest specifically in infrastructure projects that support sustainable development.” 

While delegates from all 86 countries and over 3,000 attendees will be present, this is also the third meeting of AIIB’s board of governors. 

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The board of the bank plans to invest $100 million in India now and another $100 million later, in the National Infrastructure Investment Fund (NIIF). The money will go into the NIIFs Fund of Funds and not the master fund, Garg said. In two-and-a-half years, the -bank has approved and funded 35 projects across different sectors, for $ 4.4 billion as of April 2018. 
 

This time, the summit will focus on financing sustainable infrastructure projects, and will include sessions on gender, climate change, engagement with non-government organisations and technology.