India applies for $2bn loan from AIIB, ADB for vaccine purchase
India has applied for a $2 billion loan from Asian multilateral development banks to purchase around 700 million Covid-19 vaccines as it looks to boost the immunisation rate of the country’s eligible population.
Officials in New Delhi aware of the plan said it was not an unusual practice and was meant to leverage India’s membership of multilateral financing institutions as many countries do.
The Beijing-based Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB) in Manila are expected to soon process India’s loan request, which will be used to purchase 667 million Covid-19 jabs to vaccinate at least 317 million people in 19 states across the country.
“The ADB has agreed to finance $1.5 billion and AIIB will supplement (it) with another $500 million. The vaccines will be purchased (by India) under a competitive process,” DJ Pandian, AIIB vice president for Investment Operations, said in Beijing on Tuesday.
The Indian government will put in some $58 million for the project.
“The project will support procurement of safe and effective vaccines against Covid-19,” an AIIB project summary says, adding that it will be implemented under ADB’s APVAX, or Asia-Pacific Vaccine Access Facility, mechanism. The finance ministry did not respond to an email query on this matter.
A government official aware of the development said requesting anonymity, “Multilateral agencies have been always providing low-cost funds to their members, particularly developing countries for various developmental projects.
“For example, ADB has set up about a $9 billion vaccine initiative, known as Asia Pacific Vaccine Access Facility (APVAX), which offers equitable support to its developing member countries in procuring Covid-19 vaccines.
“It is meant for all eligible members, including India. Like any other country, India also gets multilateral fundings for various developmental projects, including funds for healthcare”.
“Cost of multilateral funding is usually very low, which helps governments to save on their borrowing costs. It is part of the government’s overall resource mobilisation strategy,” this person added.