China-backed AIIB eyes $1 billion infrastructure push in India
The Asian Infrastructure Investment Bank is currently proposing to fund a metro rail system in Mumbai, rural road construction in the state of Madhya Pradesh, and irrigation and flood control projects in West Bengal.business Updated: Feb 28, 2018 19:20 IST
India’s backlog of infrastructure projects and institutional capability means it has more “shovel-ready” projects to fund than any other South Asian country, the Asian Infrastructure Investment Bank’s president said in an interview.
The AIIB, a multilateral investment bank proposed by China that started operations in 2016, has already approved funding for roughly $1 billion worth of projects in India and considering around $1 billion more. That includes a $200 million investment in New Delhi’s National Infrastructure Investment Fund, said Jin Liqun, who steers the bank’s $100 billion in registered capital.
“It’s quite natural for this bank to have a large exposure to India,” Jin told Bloomberg News. “The need is there and institutional capability of India is higher than other countries. So it’s easier for India to be ready to provide us with shovel-ready projects to finance.”
The focus in India, the bank’s biggest borrower, has been on rural roads, mass transit and power projects. The bank is currently proposing to fund a metro rail system in Mumbai, rural road construction in the state of Madhya Pradesh, and irrigation and flood control projects in West Bengal.
But the bank would like to seek a better investment balance across South and Southeast Asia, Jin said.
“The bank should look at a more balanced lending program,” he said, noting work was ongoing in other South Asian countries such as Bangladesh, Pakistan and Sri Lanka. “It takes longer to develop a pipeline, to have shovel-ready projects.”
The AIIB, which was proposed under Chinese President Xi Jinping’s leadership and has China as its largest shareholder, will work with other multilateral development banks such as the Asian Development Bank and World Bank, Jin said.
Belt and Road
He didn’t rule out the idea that the AIIB could jointly fund projects that are part of China’s global infrastructure-building Belt and Road Initiative, which might put India, the AIIB’s second-largest shareholder, in an awkward position.
New Delhi has objected to China’s BRI because it funds infrastructure in Pakistan-administered Kashmir, which India claims as its own sovereign territory. China currently has planned investments of more than $50 billion in Pakistan, India’s arch-nemesis.