With $4.5 billion in loans, and a $1 billion more in pipeline, co-founder India is top China-led bank borrower
The China-led Asian Infrastructure Investment Bank (AIIB)’s prompt move to set up a Covid-19 support fund for its members is an example of the Multilateral Development Bank’s (MDB) “power of action”, President Xi Jinping said on Tuesday.
Xi said the AIIB, coalition in which India is a co-founder, moved “…promptly to set up a Covid-19 Crisis Recovery Facility (CRF) to support its members in containing the virus and reviving their economies. This is a typical example of the AIIB’s power of action”.
The Chinese President was speaking at the fifth annual meeting of the Beijing-based bank, proposed by him in late 2013, and launched in January 2016.
Since its launch, India has emerged as the overall top borrower — $4.5 billion — from the Beijing-based bank, and also the top beneficiary of Covid-19-related relief fund. As the largest borrower, India has almost 25 percent of all approved AIIB loans channelled to it.
India remains the top virus relief fund borrowers as of now with $500 million and $750 million in its lending history, followed by $750 million each for Indonesia and the Philippines, $500 million for Pakistan and $250 million for Bangladesh.
Besides the $4.5 billion, India is set to get over $1 billion for building mass transport systems, including the Delhi-Meerut Regional Rapid Rail Project costing $500 million, Mumbai Metro line-5 costing $350 million and Chennai Metro Corridor-4 costing $350 million.
All the three projects are in advanced stages of approval and are likely to receive a nod in six-to-nine months.
“It has got off to a good start. From the 57 founding members to today’s membership of 102 spanning the six continents of Asia, Europe, Africa, North America, South America and Oceania, the AIIB has grown from strength to strength and provided nearly US$20 billion in infrastructure investment to its members,” Xi said at the online meeting. AIIB, Xi said, has established itself in the world as a new type of professional, efficient and clean multilateral development bank.
“The initiative is designed to develop infrastructure and connectivity in Asia and deepen regional cooperation for shared development,” Xi said.
At least nine of the 17 loans approved for India through the AIIB since 2017 are standalone loans from the bank while the remaining loans have been co-financed with other MDBs including the World Bank and the Asian Development Bank.
The AIIB has loaned India some $1.25 billion for fighting the Covid-19 pandemic in two tranches in May and June – the second part of $750 million approved on June 17, two days after the deadly Galwan Valley clash at the line of actual control (LAC) between Indian and Chinese border troops.
Soon after the loans were sanctioned, and though the AIIB is an MDB with New Delhi as a founding member, the Chinese state media made it a point to say that it showed that Sino-India economic ties should not be hampered by the tension at the border.
“China apparently does not want the border tensions to extend to the economic field,” Long Xingchun with the Academy of Regional and Global Governance at Beijing Foreign Studies University, told state media.
The AIIB loans to India have been given to states like Andhra Pradesh, Gujarat, Tamil Nadu, Rajasthan, and West Bengal.
Some projects it has financed or partly funded include Bangalore Metro Rail Project and Mumbai Urban Transport Project.