Tuesday, June 16, 2020

AIIB Approves USD750-M Loan to India for COVID-19 Response


Beijing, China—The Asian Infrastructure Investment Bank (AIIB) has approved a USD750-million loan to India to assist the government to strengthen its response to the adverse impacts of the COVID-19 pandemic on millions of poor and vulnerable households.

Cofinanced with the Asian Development Bank, the budgetary support will go toward bolstering economic aid for businesses, including for the informal sector, expanding social safety nets for the needy, and strengthening the country’s health care systems. 

India is extremely vulnerable to the pandemic given that around 270 million people continue to live below the national poverty line and around 81 million live in densely populated informal settlements with limited access to health services, according to the World Bank. The disruption in economic activities threatens to impact poor households disproportionately, especially women, many of whom are in employed in the informal sector.

“Many of the world’s low and middle-income countries are still in the early stages of the health crisis but are already feeling the impacts of the pandemic. This poses an enormous risk for millions across India who have only recently emerged from poverty,” said AIIB Vice President, Investment Operations, D.J. Pandian.

The International Monetary Fund has revised its 2021 GDP forecast for the country to 1.9 percent, which is about 3.9 percent lower than its January 2020 forecast.

Pandian added, “Our support to India also aims to ensure economic resilience to prevent long-term damage to the productive capacity, including human capital, of India’s economy.”

AIIB’s total sovereign loans to India that have already been approved amount to USD3.06 billion, including a recent USD500 million COVID-19 emergency response. The current loan will be the second for India under AIIB’s COVID-19 Crisis Recovery Facility (CRF), which was created as part of the coordinated international response to counter the pandemic, to support AIIB members’ urgent economic, financial, and public health needs and quick recovery from the crisis.

While AIIB does not have a regular instrument for policy-based financing, the Bank is extending such financings on an exceptional basis under the CRF to support its members through projects cofinanced with the World Bank or the Asian Development Bank.

AIIB is currently reviewing projects from its members. Projects being proposed under the CRF can be found hereAdditional information about the India COVID-19 Active Response and Expenditure Support Program can be found here.


About AIIB
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia. Headquartered in Beijing, we began operations in January 2016 and have now grown to 102 approved members worldwide. By investing in sustainable infrastructure and other productive sectors in Asia and beyond, we will better connect people, services and markets that over time will impact the lives of billions and build a better future.

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