AIIB sees India exposure rising to $20 billion over next five years

Vice President for Investment Solutions Ajay Bhushan Pandey said AIIB plans to increase annual lending to about USD 17 billion over the next few years, up from the present USD 10 billion

Multilateral lender AIIB's exposure to India may grow to reach $20 billion over the next five years from the present $12 billion, a senior official said on Thursday.

The Asian Infrastructure Investment Bank (AIIB) has asked all potential borrowers to undertake an exercise to list out a pipeline of possible projects which it can lend to, its Vice President for Investment Solutions Ajay Bhushan Pandey told reporters here.

"The $12 billion India exposure can become $20 billion in the next 4-5 years," said Pandey, a career bureaucrat who joined the bank post-retirement, on the sidelines of a FICCI industry event here.

 

He said AIIB plans to increase annual lending to about $17 billion over the next few years, up from the present $10 billion.

"We about $2-3 billion of the additional $7 billion can come to India (annually)," Pandey said, noting that India is already the largest borrower in its $ 60 billion portfolio.

India is the second-largest shareholder in AIIB, which was established in 2016 and currently has 320 projects across 38 countries, he added.

"We want to pass on the maximum benefits to India and Maharashtra in specific, given the huge infrastructure investment needs in the country," Pandey said, ahead of his scheduled meeting with state Chief Minister Devendra Fadnavis.

Declining to specify the projects where it plans to commit resources, Pandey said AIIB will be happy to finance dams, data centres, IT parks, manufacturing parks, water, waste and waste-to-power projects. The exact details of the projects have to come from the borrower, he maintained.

Pandey, an IAS officer of the Maharashtra cadre, is leading a 13-member team of AIIB that has already met Finance Minister Nirmala Sitharaman and senior officials from various ministries.

The team will also meet the newly created Development Finance Institution (DFI), National Bank for Financing Infrastructure and Development (NaBFID), during its Mumbai visit, he added.

AIIB could co-lend with NaBFID, provide loan guarantees, or offer takeout financing, Pandey said, adding that the multilateral bank can take long-term exposures of up to 30 years, while domestic institutions can focus on short-term lending.

He also urged borrowers to build transaction advisory capabilities as part of project development.

When asked about geopolitical developments and the impact he sees on AIIB, Pandey exuded confidence that it will not be impacted by any events.

"We are a professionally run entity, and confident of not being impacted by the geopolitical churn. Over the last ten years, there has been a big churn on the geopolitical front, but we have continued with our lending operations and grown our book to $ 60 billion," he said.