Beijing-based Asian Infrastructure Investment Bank (AIIB) has approved a loan of $750 million for India to assist the government in its fight against covid-19, according to a press statement released Wednesday. With this loan, AIIB’s total sovereign funding for India to mitigate the damage caused by the pandemic and related curbs has reached $1.25 billion.
Co-financed with the Asian Development Bank (ADB), 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,” the bank said.
‘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 impact of the pandemic,’ DJ Pandian, vice president, investment operations, AIIB, said.
‘This poses an enormous risk for millions across India who have only recently emerged from poverty,’ 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,’ he said. AIIB’s total sovereign loans to India that have already been approved amount to $3.06 billion, including a recent $500 million covid-19 emergency funding.
The latest advance 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 loans on an exceptional basis under the CRF to support its members through projects co-financed with the World Bank or the ADB, the press release added.