The Asian Infrastructure Investment Bank (AIIB) is still in consideration regarding the decision to finance a USD 8-billion scheme for improving health infrastructure in India on a district level to prepare the country for the future healthcare difficulties.
“The multinational is still reviewing the scheme, it requires developing health infrastructure in every district. It will further see the advancement of testing facilities with the Indian Council of Medical Research (ICMR),” AIIB Vice President D J Pandian told PTI in an interview.
The multilateral funding agency headquartered in Beijing had earlier green-lighted financial assistance of USD 1.2 billion to India to face the COVID-19 pandemic.
World Bank and Asian Development Bank are involved in the discussion with the Health Department of the Government of India. The Finance Ministry is in the process to put up a plan for this hopeful scheme and the minute details are being straightened out. If things go out smoothly the funding by the AIIB can be cleared this year itself on a fast-track basis.
With regard to COVID-19 aid, Pandian said the AIIB has accepted two loans of USD 500 million and USD 750 million so far, respectively. The first loan of USD 500 million allocated in May for the purpose of developing an adaptable healthcare system that efficiently treats COVID-19 patients and prevents its spread. A USD 750 million loan was shown the green light in June to assist the government in getting a stronghold in its battle against the adverse impacts of COVID-19 in poor and vulnerable households.
India as a member of the AIIB
The AIIB is a multinational development bank with an aim to enhance social and economic output in Asia. They began functioning in 2016 and have now wholly instituted to 103 approved members worldwide. AIIB created a Crisis Recovery Facility to support its members and clients in lessening and reducing economic and financial health pressures arising from COVID-19.
India is a founding member of AIIB with the highest recipient of investments by the bank. Currently, India has a 7.65 per cent vote share in the organisation while China holds a whopping 26.63 per cent stake in the organisation that was set up in 2016.
For AIIB, India has been the highest borrower and accounts for 25 per cent of the total credit it has given so far. As of July 16, 2020, AIIB has accepted up to USD 19.6 billion for 87 projects in 24 different economies. Since its establishment in 2016, AIIB has provided loans to the tune of USD 4.3 billion across 17 projects in India.
The existing projects include Mumbai urban transport project, Andhra Pradesh and West Bengal water supply improvement projects among others.
As part of its efforts to better interdependence, AIIB had announced in July that it was looking forward to providing loans worth USD 3 billion for various large infrastructure projects based in India. According to bank officials, the current relation is very robust and many Indian infrastructure projects are at various stages of approval.
AIIB investments in India
Indian Projects worth USD 4.5-5 billion are in the pipeline and are expected to be approved in a year’s time.
According to the bank’s official website, the projects that are on the verge of approval are Delhi-Meerut rapid rail corridor, Haryana Bypass Link Railway, Mumbai Metro Line V and Mumbai Transport Project.
These projects, when once completed, will not only provide connectivity but also considerably reduce carbon footprint.
India has emerged as a top borrower from the China-sponsored Bank with USD 1.5 billion worth of loans in 2019 and USD three billion more in the pipeline.
China is the largest shared holder followed by India with an authorised capital of USD 100 billion.
China proudly holds 26.06 per cent voting shares in the bank. India is the second-largest with 7.5 per cent followed by Russia 5.93 per cent and Germany with 4.5 per cent.
The AIIB board of directors has formerly mentioned on viewing Indian projects favourably because of India’s economic and financial credentials.