1. Centre starts work to prepare infra projects for funding from AIIB

Centre starts work to prepare infra projects for funding from AIIB

India’s infrastructure investment requirement was pegged at $1 trillion in five years through 2017. AIIB would enable India to access new resources for the financing of national and cross-border infrastructure projects

By: | New Delhi | Published: August 27, 2015 12:54 AM

The Centre has started work to put big infrastructure projects in the pipeline over the next six months for possible funding from the newly-created Asian Infrastructure Investment Bank (AIIB), as it steps up efforts to tap newer avenues for infrastructure development.

“We have written letters to all the state governments and major administrative ministries in the central government such as power and renewable energy to suggest projects,” a senior finance ministry official said.

On June 29, 50 countries, including India, signed an agreement to set up the $100-billion new regional development bank, modeled on the lines of the Asian Development Bank (ADB), at Beijing. India is the second largest shareholder with 8.52% in AIIB, after China’s 30.34%. China, which analysts say could use its greater say in AIIB to increase its clout in the region, is working at great speed to make the bank operational by December. Before end-December, India will also be ready with its pipeline of projects for the consideration of AIIB. It could also shift some of the projects in the shelf to AIIB from the World Bank and the ADB as these multilateral agencies have fund constraints.

Initially, AIIB would fund government-backed projects.

India’s infrastructure investment requirement was pegged at $1 trillion in five years through 2017. AIIB would enable India to access new resources for the financing of national and cross-border infrastructure projects.
Sources said the government has already zeroed in on a few bankable solar projects for AIIB funding. “We have a lot of non-conventional energy projects which could be lined up for AIIB financing,” the same official said.

Several government-run companies have plans to set up 19,000 MW of green energy generation facilities, mostly in solar power sector. They include NTPC, Satluj Jal Vidyut Nigam, Coal India, National Hydroelectric Power Corporation and Steel Authority of India. India expects annual funding from AIIB and the New Development Bank, or BRICS Bank, another new multilateral institution being set up in Shanghai, to match the $2-3 billion each provided by the World Bank and ADB to the country.

Funding constraints and lack of reforms in the existing multilateral institutions pushed BRICS countries to take the lead in setting up the new institutions.

Regional lender
* On June 29, 50 countries, including India, signed an agreement to set up the $100-billion new regional development bank, AIIB, modeled on the lines of the Asian Development Bank, at Beijing
* India is the second largest shareholder with 8.52% in AIIB, after China’s 30.34%
* China, which analysts say could use its greater say in AIIB to increase its clout in the region, is working at great speed to make the bank operational by December

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