India is the largest borrower from AIIB, with 30% share of the bank’s total lending coming to the country.

Asian Infrastructure Investment Bank (AIIB) plans to invest $1 billion funds in India over the next one year. The multilateral development bank has already approved a project loan worth $500 million (Rs 3,589 crore) to Mumbai Urban Transport Project (MUTP) towards the development of suburban infrastructure around Mumbai.

“Within the next year or so, (we have committed) at least an additional $1 billion in projects, primarily power and water projects… There is a power distribution project in Assam (with a funding requirement of Rs 400 million), there is also another project in the works in West Bengal,” Laurel Ostfield, director-general, communications, AIIB told FE. AIIB was started by 67 countries, and India is its second largest shareholder in it after China.

The Beijing-headquartered bank also approved $75 million (Rs 538.39 crore) in September to renewable energy financier Tata Cleantech Capital for onward lending to projects. The total committed financing by AIIB in India as of now stands at $2.9 billion (Rs 20,817 crore).

“The MUTP project is mainly to make a four-lane between Virar and Dahanu, and also to introduce a new two-lane from Panvel to Karjat. In addition to that, in 36 places we want to strengthen the crossings,” said D J Pandian, vice president and chief investment officer, AIIB. He added that the MUTP funding will be disbursed after 90% of the land acquisition is completed. Currently, around 50-60% land acquisition is done for the project. The loan for the project will be for a duration of 35 years and local authorities will pay 0.75- 1.40% over the London Interbank Offered Rate (LIBOR) as interest, Pandian said.

Apart from MUTP, the bank is in talks with authorities for funding metro railway projects in Mumbai as well. India is the largest borrower from AIIB, with 30% share of the bank’s total lending coming to the country. Pandian said the bank aims total funding approvals to reach $10 billion per annum by 2025, and expects investments into India growing proportionately. Apart from these projects, AIIB has also approved an investment of up to $50 million in Oriental Structural Engineering’s infrastructure investment fund and $100 million funding for L&T Infrastructure Finance.