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Infrastructure financing : A challange
Why in the news ?
- Finance Minister said infrastructure development will need investments of $4.5 trillion over the next decade and the cost of the money could be a challenge.
- Finance Minister was talking at the Asian Infrastructure Investment Bank’s (AIIB) two-day annual summit that began in Mumbai.
More on news
- Infrastructure creation requires $4.5 trillion in investments over the next 10 years.
- Interest rates are rising globally as well as domestically, raising the cost of finance.
- India is the second highest equity investor in AIIB and also the largest recipient of funds from the multilateral agency that started operations in January 2016.
- India has picked up 28%, or $ 1.4 billion of the AIIB’s total funding for seven projects.
- The minister said the required funds will be available and raising it will not be a “deterrence” for infra creation.
- He also said the country is looking forward to investments in nine more projects with a funding of $2.4 billion from the Beijing headquartered agency.
- AIIB approved an equity investment of $100 million in India’s National Investment and Infrastructure Fund’s (NIIF) and is considering a further investment of $100 million in the future.
- India has proposed nine infra projects, including four in the private sector, to the AIIB for funding which will entail an investment of $2.4 billion.
- The overall funding for the four private sector projects will be $860 million.
- At present, the AIIB has funded seven projects worth $1.4 billion since its formation in 2016, making the country as the biggest beneficiary.
AIIB
- The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank headquartered in Beijing.
- Like other development banks, its mission is to improve social and economic outcomes in its region, Asia, and beyond.
- The bank opened in January 2016 and now has 86 approved members worldwide.
- Its purpose is to provide finance to infrastructure development and regional connectivity projects in Asia-Pacific region.
- China is largest shareholder of AIIB with 31.02% voting shares. India with 8.72% vote share is second largest shareholder followed by Russia, Germany and South Korea.
Source
The Hindu