AIIB approves first loans for projects in four countries

Pakistan,Bangladesh, Indonesia and Tajikistan will get the first set of loans totalling $509 million from China sponsored Asian Infrastructure Investment Bank (AIIB) in which India is a founding member.

The Beijing based AIIB will disburse $509 million to finance four projects in the four countries.

The four projects were approved in Board of Directors meeting held in Beijing.

Finance Minister Arun Jaitley who is on a five-day visit here will attend the Board of Governors meeting of the bank on Saturday.

Asked whether any projects have been identified for financing in India, Jaitley told media here he will speak on the subject on Saturday.

India is the second largest shareholder in the bank after China.

AIIB was officially established in late 2015 with authorised capital of $100 billion. China is the largest shareholder with 26.6% voting shares. India is the second largest shareholder with 7.5% followed by Russia with 5.93% and Germany with 4.5%.

Projects approved by the bank included a $165 million loan for a Power Distribution System Upgrade and Expansion Project in Bangladesh, $216.5 million loan for a National Slum Upgrading Project in Indonesia, expected to be co-financed with the World Bank.

It includes a $100 million loan to finance the Shorkot-Khanewal Section of National Motorway M-4 in Pakistan, co-financed with the Asian Development Bank (ADB) and the United Kingdom's Department for International Development (DFID).

A $27.5 million loan for the Dushanbe-Uzbekistan Border Road Improvement Project in Tajikistan, co-financed with the European Bank for Reconstruction and Development (EBRD) was also included in the projects.

"I am delighted to announce that AIIB's Board of Directors has today - just six months after the Bank's inauguration - approved the first group of loans," said AIIB's President Jin Liqun while announcing the loans.

"These projects, which span the energy, urban development and transport sectors, will help to bridge the region's critical infrastructure financing gap and strengthen regional connectivity," Liqun said.

The bank's Vice President and Chief Investment Officer DJ Pandian welcomed new investments.

"The Bank places tremendous importance on ensuring that its investments lead to positive results and measurable outcomes for its clients and will improve lives of millions of people in different regions of Asia," Pandian said in an AIIB statement.

The bank, which supports infrastructure development and regional connectivity in Asia, is targeting lending of approximately $1.2 billion in 2016.