ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Economy

China-led AIIB to spend $3.5bn with focus on India

Bank says it is 'apolitical' and wants to connect Asia and Africa

Construction in New Delhi
Laborers constructing a flyover in New Delhi, India in February.    © Reuters

MUMBAI -- China-led Asian Infrastructure Investment Bank said Monday it will invest or lend $3.5 billion this year to India, Bangladesh, Turkey and Egypt for projects aimed at strategically connecting Asia and Africa.

Since its launch in 2016, AIIB has approved around $4.4 billion of loans. The body, which comprises 86 member-countries, revealed the new plan at the start of its two-day annual meeting in Mumbai. India is AIIB's second largest shareholder after China.

"India is the largest borrower, we are working in Bangladesh, Turkey ... Country is not a limitation," said AIIB Vice President and Chief Investment Officer D.J Pandian, adding that the decision still needs approval by the bank's board of directors.

India has already borrowed $1.21 billion from AIIB. On Sunday, Indian Economic Affairs Secretary Subhash Chandra Garg, told reporters India has sought project financing of around $2.4 billion from the bank. Of that, $200 million will be invested in India's National Investment and Infrastructure Fund, which funds commercially viable infrastructure projects.

Six projects in India have been approved by the AIIB, while another six are in the pipeline. These new projects include a Mumbai subway line, irrigation and flood management projects in West Bengal, and rural roads and city development for Amravati, the new state capital of Telangana in the south. Bangladesh has proposed a water supply and sanitation project while Turkey has sought funds for a gas storage expansion project in the middle of the country.

AIIB said it has enough capital to back the projects and does not need of fresh funding. Pandian said that the bank has $20 billion in cash and $80 billion worth of guarantees from member countries.

AIIB President Jin Liqun speaks at the annual meeting on June 25 in Mumbai. (Photo by Yuji Kuronuma)

Pandian also stressed that AIIB, which has faced questions about Chinese influence on its decision-making, is "an apolitical organization." Some have said that Beijing-based AIIB had hoped to change the idea that it's an arm of the Chinese government by holding the annual meeting in India, China's biggest regional rival.

Speaking at a separate session, AIIB President Jin Liqun said the bank's vision is to collaborate closely with all governments that it works for, especially on behalf of private sector companies that are working on infrastructure projects .

"We try to give you feedback ... I hope the government will be listening to and do something practical to help them (private players) out. I think in this regard the private sector will be willing to pour in money," he said.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more