India will be largest borrower for AIIB: Sir Danny Alexander
Mumbai: India will be the largest borrower for Asian Infrastructure Investment Bank (AIIB), a top official of the Beijing-based multilateral bank said. The bank, he said, will be open to lend or invest in financially viable projects in the infrastructure sector that are currently in a stressed condition.
Ruling out any implications of the geopolitical tension between India and China over the Doklam issue on the bank’s lending activities in India, Sir Danny Alexander, vice president and corporate secretary at AIlB said, “India is a very important and influential member of AIIB. India will be the largest borrower for the bank and the fact that AIIB’s next annual general meeting will be held in Mumbai during June next year is the proof that internal politics of member countries will not impact the bank’s operations.” He further said any dispute resolution between members will be resolved through the bank’s international relations policy that is already in place.
To be sure, China is the largest shareholder in the bank and India the second largest. The total capital of the bank is $100 billion of which $20 billion is paid up.
On being asked if AIIB will be interested in some of the stressed infrastructure projects in India after the insolvency and bankruptcy code has come in, Alexander said that although the bank has not considered any such projects, AIIB “could look at such assets if India should suggest.”
AIIB is looking to fund financially viable and environmentally sustainable projects in India especially in areas like sustainable urban cities , renewable energy, roads, ports, rail and energy pipelines among others. The bank is also looking to participate in Mumbai and Bangalore metro projects. For Mumbai metro, the bank will provide about $500 million. This proposal will be considered by the AIIB board in December 2017.
The multilateral lender has approved its first ever equity investment in India worth $150 million in India Infrastructure Fund, an infrastructure focused private equity fund. The bank is keen on doing equity investments as well apart from debt transactions in order to mobilise private capital. “Funding needs for infrastructure sector in Asia are massive. Funding from the multilateral institution and national governments is not sufficient. Private money needs to be mobilised,” Alexander said.
Alexander said the bank will be open to fund governments, banks and private firms through debt, equity and guarantees. He also said that AIIB has been approached by some Indian private sector firms for infrastructure funding as well.
“We shall screen such proposals on three criteria—financial viability, environmental sustainability and compatibility with respect to bank’s policy,” Alexander said.
AIIB’s 3rd AGM will be held in June 2018 in Mumbai. Alexander was in Mumbai to meet officials of Maharashtra government.
AIIB has approved three transactions in India so far—debt funding for a rural roads project in Gujarat and a power plant in Andhra Pradesh and equity investment in India Infrastructure Fund. The total amount approved with respect to India by AIIB stands at $639 million.
- India’s GDP to reach $5 trillion by 2025: Top official at World Bank
- Petrol price hit highest level under BJP govt, diesel at record high
- Govt serious in bringing fugitive economic offenders to task: Rajnath Singh
- Sushma Swaraj arrives in China for talks with Wang Yi, SCO meet
- Make the best of technology to deal with administrative delays: Modi tells bureaucrats