AIIB to step up lending in India; plans to approve loans worth $3 billion in next 12 months

As part of its effort to improve connectivity, Beijing-based multilateral funding agency AIIB is looking to provide loans worth $3 billion for various large infrastructure projects, including Delhi and Meerut Rapid Rail, Mumbai Metro Rail and Chennai Peripheral Ring Road project, over the next 12 months.

India is the largest borrower, which accounts for 25 percent of the total lending by Asian Infrastructure Investment Bank (AIIB) so far, the bank's vice president D J Pandian told PTI in an interview.

As of July 16, 2020, AIIB has approved up to $19.6 billion for 87 projects in 24 economies. Since its inception in 2016, AIIB has approved loans to the tune of $4.3 billion across 17 projects in India.

Talking about future financing opportunities, Pandian said pipeline is very robust and many infrastructure projects are at various stages of approval.

"Projects worth $4.5-5 billion are there in the pipeline and we will be approving another $3 billion to India in a year's time if everything goes well," he said.

According to him, the projects being considered for financing are Delhi-Meerut rapid rail corridor ($500 million), Haryana Bypass Link Railway ($400 million), Mumbai Metro Line V ($350 million) and Mumbai Urban Transport Project ($500 million).

In Maharashtra alone, three projects of about $1.2 billion are under consideration, he said, adding three road projects of Tamil Nadu including Chennai Peripheral Ring Road project worth $1.1 billion are at different stages of approval.

Due to COVID-19, he said, environmental and social due diligence is getting delayed because of travel restrictions.

These projects, once completed, will not only improve connectivity but reduce carbon footprint.

Asked about assistance to fight COVID-19 pandemic, Pandian said, AIIB has approved two loans of $500 million and $750 million, respectively.

The first loan of $500 million sanctioned in May was towards building a resilient health system that can effectively treat COVID-19 patients and prevent its spread, he said.

Last month, a $750 million-loan was approved to India to help the government strengthen its battle against the adverse impact of COVID-19 on poor and vulnerable households.