Beijing-based bank approves $750 million loan to India for COVID-19 response

New Delhi, Jun 17

Beijing-based Asian Infrastructure Investment Bank (AIIB), on Wednesday, said it had approved a $750 million (around Rs 5,714 crore) loan to India to help the government strengthen its battle against the adverse impact of COVID-19 on poor and vulnerable households.

“Co-financed 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,” the multilateral agency said in a statement.

India was 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, it added.

Meanwhile, India registered the highest-ever spike of 2,003 COVID-19 fatalities pushing the death toll to 11,903 on Wednesday, while the caseload rose to 3,54,065 with 10,974 new COVID-19 infections, according to the Union Health Ministry data.

“The disruption in economic activities threatens to impact poor households disproportionately, especially women, many of whom are employed in the informal sector,” said the AIIB.

According to the AIIB vice-president, Investment Operations, DJ Pandian: “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. This poses an enormous risk for millions across India who have only recently emerged from poverty.”

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

The 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 response.

The current loan will be the second for India under the AIIB’s COVID-19 Crisis Recovery Facility (CRF).

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

As per the statement, the AIIB is currently reviewing projects from its members.

The AIIB began operations in January 2016 and has 102 approved members worldwide. PTI