AIIB approves infra loans worth $1.5 billion to India

3 years ago

The Asian Infrastructure Investment Bank (AIIB) has approved $1.5 billion in loans to India for infrastructure projects in 2018, a senior official of the Beijing-based bank said on Tuesday. The funds are meant for investment in energy, roads and urban development projects, the multilateral bank’s chief investment officer DJ Pandian said. The AIIB will consider providing more funds for such projects next year, he added. Most of the funds for the energy sector will likely be dedicated to renewables.India requires investments worth at least $125 billion to complete its ambitious target of adding 175 GW in renewables by the end of 2022.

AIIB earmarks $200 m for NIIF

Of the loans committed by the multilateral bank, around $200 million will be invested under the National Investment and Infrastructure Fund (NIIF) framework. Last year, finance minister Arun Jaitley had said the country required investments worth an estimated Rs 43 lakh crore (about $646 billion) in the infrastructure sector over the next five years. Since most public-sector banks are struggling to cope with toxic assets, their ability to fund large infrastructure projects is very limited. So funds for infrastructure from other sources, including NIIF, assume importance. In January, NIIF announced its tie-up with Dubai-based ports operator DP World to create a fund to invest up to $3 billion of equity in India’s transport and logistics sectors. This was NIIF’s first investment, following the first close of the NIIF Master Fund in October 2017 with contributions from a subsidiary of Abu Dhabi Investment Authority and four domestic institutional investors.

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