China-based Asian Infrastructure Investment Bank (AIIB) along with the Asian Development (ADB) are currently processing a USD 2 billion loan for India to purchase COVID-19 vaccines.
Of the USD 2 billion loan, the Manila-based ADB is expected to finance USD 1.5 billion and AIIB is considering providing USD 500 million, AIIB’s Vice President D.J. Pandian said here on Tuesday.
“The ADB has agreed to finance USD 1.5 billion and AIIB will supplement with another USD 500 million,” Pandian said.
The loan is under consideration from the AIIB board, he said, adding that India has applied for it three months ago. About 667 million doses of COVID-19 vaccines were expected to be procured through the loan, according to the Bank.
He said the vaccines will be purchased by the Government of India through a competitive process and the ADB will be administering the purchasing system and implement it under ADB’s APVAX, or Asia-Pacific Vaccine Access Facility, mechanism.
India, which produces Covishield and Covaxin, has recently crossed an inoculation milestone of administering 100 crore Covid-19 vaccine doses to its citizens against the deadly virus. India also plans to resume vaccine exports and provide the jabs to a number of countries.
Besides funding various infra projects in India, the AIIB has also granted USD 1.75 billion to India for the COVID-19 relief budget support.
Pandian said the Beijing-based AIIB, in which India is the second-largest shareholder after China, has so far approved 147 projects amounting to USD 28.9 billion.
Besides being the second-largest shareholder, India has emerged as its biggest beneficiary by obtaining USD 6.7 billion for 28 projects, he told the media as the bank held its 2021 annual general body meeting through video link.
On Tuesday, the AIIB formally granted USD 356.67 million loans for the expansion of the Chennai metro rail system. The bank is also considering several other infrastructure projects for the development of Chennai city and its suburbs.
Pandian said the AIIB is backing several other infrastructure projects for Chennai. “The USD 400-million Chennai Metro Corridor-5 is already under pipeline at an advanced stage of project approval process. We are also working on a few other transport projects in Chennai, including the Chennai Outer Ring Road project worth USD 300 million,” Pandian said.
The energy and transport sectors have received the highest amount of financing from the AIIB, said Pandian who oversees all sovereign and non-sovereign lending for the AIIB in South Asia, the Pacific Islands and South-East Asia.
He said that since its inception, the AIIB has so far approved 147 projects amounting to USD 28.9 billion. By 2025, the bank’s climate finance will be 50 per cent and from next year all projects to be approved will be Paris climate agreement aligned, he said.
Significantly, the AIIB sponsored by China has not funded any projects under Beijing’s Belt and Road Initiative (BRI) nor its flagship USD 60 billion China-Pakistan Economic Corridor (CPEC).
“We are a multilateral bank. Our job is to do infrastructure development projects. The BRI is different, AIIB is different. To my knowledge nothing has come up from BRI,” Pandian said while replying to a question.
India has objected to China over the CPEC as it is being laid through Pakistan-occupied Kashmir (PoK).
Pandian said the bank has a strict policy related to financing projects in the disputed areas. Consent from all sides is required to fund such projects, he added.
In Pakistan, he said, the AIIB has financed seven infrastructure projects amounting to USD 1.5 billion.
Starting with a membership of 57 countries in 2015, the AIIB membership has now grown to 103 countries spread across the world. The US and Japan, however, have not joined the bank over their reservation of China’s sponsorship.
About how the bank has fared since its inception, Pandian said, “I think AIIB has done its job. It’s a start-up bank” starting from scratch.
In future, the bank’s concentration will be on small countries where more projects, even if they are small, will be undertaken, he said.
He said the Bank has put in an excellent multilateral governance system. It has 12 directors from different countries and has a non-resident board. Its Management was drawn from different countries and followed universal procumbent policy, he said.