AIIB to mull $200 mn investment in National Investment & Infra Fund

Asia Infrastructure Investment Bank, the Beijing-based multilateral financial institution, will take up the proposal for a $200 million investment in the government-backed National Investment and Infrastructure Fund (NIIF) at its annual meeting next month in Mumbai.

NIIF has an aggregate target corpus of $2.1 billion (the Fund) for investments into Indian infrastructure assets of which the government will provide the lion's share of $1 billion. 

The remaining $900 million will be raised through other investors.

Danny Alexander, Vice President, Asia Infrastructure Investment Bank (AIIB) said that the AIIB’s third Annual Meeting will be held in Mumbai on June 25 and 26. The board will consider the proposal (investment into the fund by NIIF) then.

AIIB is working closely with NIIF to put in place a structure that will satisfy both its board of directors and NIIF requirements. There are many sub-sectors that AIIB remains keenly interested in, one of them being the renewable energy platform NIIF has with DFID, Alexander said.

The Department for International Development (DFID) is a United Kingdom government department responsible for administering overseas aid.

AIIB, which started activity in 2016, has invested $4.39 billion in 25 projects. The subscribed capital stock of the AIIB will be $100 billion, with $20 billion as paid-in capital made in five annual instalments. Currently, 98 per cent capital stock is subscribed. India holds 8.99 per cent stake in the capital of the bank, while China holds 32 per cent, according to the AIIB website.

Referring to the focus of deliberation at the third annual meeting, Alexander said that this year’s theme is “Mobilizing Finance for Infrastructure: Innovation and Collaboration,” in recognition of the private sector’s vital role in bridging the infrastructure gap.

This year’s meeting will also see the launch of the inaugural Asian Infrastructure Forum. This will bring together infrastructure practitioners in a practical and project-driven discussion, focused on matching innovative finance to critical infrastructure needs. AIIB is looking for active participation from financial sector players in India.

The multilateral body is at present engaged in discussions for funding Mumbai's Metro Line 4 project. The metro line will run from Wadala through Ghatkopar, Mulund and Thane to Kasarvadavali, covering about 32 km of distance. The Project will be implemented by Mumbai Metropolitan Region Development Authority (MMRDA).

The total cost of Metro Line 4 project is pegged at $2.24 billion. MMRDA will chip in about $1.52 billion. AIIB has proposed to give $500 million as credit and also arrange for $200 million from other investors for this project.

The bank executive said AIIB has been in conversation with various multilateral agencies and commercial banks and there is a noted interest in the metro project.

The environmental and social impact assessment and due diligence for the Metro Line 4 project is underway. Public consultation on the Social Impact Assessment is scheduled for Monday, May 28.  AIIB will attend the public consultation.