India urges AIIB to grow project financing 10-fold by 2020

NEW DELHI: India on Tuesday urged the Beijing- based Asian Infrastructure Investment Bank ( AIIB) to increase its project funding by ten- fold to US$ 40 billion by 2020.

The AIIB began its funding operations in January 2016 and has provided US$ 4 billion for 25 projects in a dozen countries.

India is the second largest shareholder of the AIIB, which has 87 members.

“With committed capital of 100 billion dollars and huge need for infrastructure in member countries, I take this opportunity to call upon AIIB to expand from financing US$ 4 billion to US$ 40 billion by 2020 and US$ 100 billion by 2025,” Indian Prime Minister Narendra Modi said in an address to the bank’s third annual meeting of the board of governors in Mumbai.

Modi said regional multilateralism through institutions such as the AIIB can assume a central role in helping to raise resources for infrastructure projects across Asia.

“Sectors such as energy and power, transportation, telecom, rural infrastructure, agriculture development, water supply and sanitation, environment protection, urban development and logistics require long-term funds. The interest rates on these funds need to be affordable and sustainable,” he said.

The theme of the AIIB’s Mumbai meeting is “Mobilising Finance for Infrastructure: Innovation and Collaboration.”

AIIB President Jin Liqun said the bank has also been approached by countries in Africa, Latin America and Europe looking for funding.

“We focus on Asia, but we also support development in other regions,” he said.

Jin cited Malaysia and Thailand as “good examples of cost recovery” in the power sector.

“Each has average electricity tariffs above average cost to make the industry profitable, which has gone hand in hand with high electricity quality.

“In a number of developing countries, pricing of utilities, especially for households, falls short of cost recovery and unless addressed properly and promptly, infrastructure bottlenecks will continue to slow down economic development,” he added.