Out-Law News | 29 Nov 2019 | 5:40 pm | 1 min. read
The Asian Infrastructure Investment Bank (AIIB) plans to invest $1 billion in India in 2020, according to financial express.
According to AIIB director general of communications Laurel Ostfield, the investment will mainly focus on power and water projects, “There is a power distribution project in Assam with a funding requirement of Rs400 million, there is also another project in the works in west Bengal,” Ostfield said.
AIIB said it has already invested $2.9bn in 13 projects in India since 2016, including a $500m loan for the Mumbai Urban Transport Project (MUTP) to ease congestion in Mumbai and another $75m to Tata Cleantech Capital Ltd for on-lending to renewable energy projects.
The MUTP will help fund construction of a 64km four lane road between Virar, the last point on the western line of suburban rail, and Dahanu. This will link peripheral areas with Mumbai by suburban rail. The AIIB is also considering investment in Mumbai metro railway projects.
It is expected that these two $575m investment projects to ease congestion in India's financial hub and to encourage capital investment in renewable energy, power transmission and water infrastructure.
AIIB vice president and chief investment officer D J Pandian said that AIIB is finalising a long term strategy. He said the bank wants total funding approvals to reach $10bn each year by 2025 and expects investments in India to grow proportionately.
Infrastructure expert Priya Dalal of Pinsent Masons, the firm behind Out-Law, said: "The Indian finance minister recently pledged to identify viable projects and allocate ₹100 trillion into infrastructure investment over the next five years, but the country remains in dire need of significant private investment to cover the shortfall in funding for such projects."
"This in turn means that the government will need to do more to create an environment that attracts greater investor confidence," said Dalal. "AIIB is one institution that has heeded this clarion call, in promising money towards vital water and power infrastructure."