AIIB Approves $455-million Loan for Andhra Pradesh

• 29 Sep 2018

The Asian Infrastructure Investment Bank (AIIB) has approved a $455-million loan to improve road transport connectivity by providing all-weather rural roads in 13 districts of the state of Andhra Pradesh.

• This will not only improve transport links to facilitate the delivery of agricultural and farm goods to markets but is also expected to result in better health and education outcomes.
• School attendance rates, especially among girls, are expected to improve.
• This will take AIIB’s total commitment to India to over $1.76 billion spread across seven infrastructure projects and a $200 million equity investment commitment to India’s National Investment and Infrastructure Fund (NIIF).

Asian Infrastructure Investment Bank

• The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia and beyond.
• Officially launched in January 2016, the AIIB is headquartered in Beijing, China.
• It is a multi-lateral development bank initiated by China and supported by a wide range of countries and regions, which provides financing for infrastructure improvement.
• The international infrastructure bank owns about USD 100 billion of subscribed capital, including approx USD 20 billion in paid-in capital.
• India is the second largest shareholder with 7.5 percent followed by Russia with 5.93 percent and Germany with 4.5 percent.
• India is also the largest recipient of loans from the bank so far.

National Investment and Infrastructure Fund

• National Investment and Infrastructure Fund (NIIF) is a fund created by the Government of India for enhancing infrastructure financing in the country. Its creation was announced in the Union Budget 2015-16.
• It is registered with SEBI as Category II Alternative Investment Fund (AIF). Category II funds are allowed to invest anywhere in any combination, but cannot take debts, except for day-to-day operation purposes. These include private equity funds and debt funds.
  • In India, alternative investment funds (AIFs) are defined by Securities and Exchange Board of India(SEBI) as any privately pooled investment fund, (whether from Indian or foreign sources), which are otherwise not coming under the jurisdiction of any regulatory agency in India.

  • The Alternative Investment Funds (AIFs) have been categorized into three classes by the SEBI, viz. Category I, Category II, and Category III.

• The objective of NIIF would be to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield, and brownfield, including stalled projects. It could also consider other nationally important projects, for example, in manufacturing, if commercially viable.