City infra gets a $500-m AIIB boost

Asian Infrastructure Investment Bank (AIIB) on Friday announced a USD 500-million loan to help build rail and road infrastructure in the megapolis. With this, the Beijing-headquartered developmental bank's overall commitment to the country has gone up to nearly USD 3 billion, making it the largest borrower with a 30 percent share.

The AIIB was started by 57 RPT 57 counties in 2016 and India is the second largest shareholder after China, and has already committed USD 2.9 billion in capital already. The USD 500-million loan for the Mumbai Urban Transport Project-3 will be for 35 years and local authorities will pay 1.40 percent over the Libor as interest.

The loan will be used to quadruple the 64-km Virar- Dahanu road corridor, a new 28-km suburban rail corridor between Panvel and Karjat, and to build 36 bridges/walls around the city's rail lines to reduce deaths. Bank's vice-president and chief investment officer DJ Pandian said over 50 percent of the land acquisition for these projects are already complete and the same will be implemented once it touches 90 percent.

Apart from the MUTP, the bank is also looking at funding some of the metro projects underway in the city. Pandian refused to comment on the bank recently withdrawing from the Amaravati project in Andhra, while AIIB's director general for communications Laurel Ostfield said the decision was taken by the investment committee, whose deliberations are confidential.

The bank is looking to pump USD 1 billion into Assam alone and is studying a USD 400-million proposal for an electricity transmission project, he said. Pandian said the government has approached AIIB and other bodies like it including the World Bank and the Asian Development Bank seeking funds for setting up electric vehicle charging infrastructure.

He said the bank is also interested in waste energy projects but such project promoters want money in the rupee, while the bank lends only in dollars and to overcome such issues, the bank's treasury is actively looking at raising resources through rupee/masala bonds as well. The bank also announced a USD 75-million commitment to Tata Cleantech Capital for on-lending to renewable projects.

It has also committed USD 50 million to a roads- focused infrastructure investment trust promoted by Oriental Structures, which has 11 assets and an overall investment of USD 350 million. This is the third commitment by AIIB in the country totalling USD 250 million, and Pandian conceded that it takes a lot more time before making an equity commitment. When asked about its exposure to the controversial Belt Road initiative of China, Ostfield said helping build connectivity is one of the bank's core mandates and declined to classify the exposure to it. But Pandian quipped that the BRI projects are discussed only here..

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)