The Asian Infrastructure Investment Bank board yesterday cleared a $200-million investment into the National Infrastructure Investment Fund that will help funnel up to $2.4 billion into the infrastructure sector.
The proposed fund will come in two tranches of $100 million each and will go into a fund of funds to be floated by the NIIF, top finance ministry officials said last evening.
“The first tranche of $100 million got approved today, which will be followed by a similar tranche on call,” interim Finance Minister Piyush Goyal said in Mumbai yesterday.
India for the first time is hosting a two-day annual meet of AIIB’s board of governors in Mumbai, that began today.
Economic Affairs Secretary SC Garg said there could be a leverage of 10-12 times on the money to be invested by the AIIB, which means that nearly $2.4 billion of investments can take place in the sector.
He said the money would come into the fund of funds like the green growth equity fund backed by the British government and will act as a platform to invest in other funds that will invest in infrastructure projects.
AIIB Vice-President Danny Alexander said the multilateral bank was also interested in the fund of funds as it would lead to higher inflows into the infrastructure sector.
The 2016-incorporated Beijing-headquartered AIIB has approved $4.4 billion investments so far in the country—its second-largest shareholder after China—which includes the earlier approved $1.2 billion, and making the country the largest beneficiary so far.
The bank has a pipeline of $1.9 billion for six projects. Alexander said it was interested in the transport, energy, water and waste management areas, given the large requirements in these sectors.
Garg said the government has sent a proposal to AIIB to infuse $475 million into the Mumbai Urban Transport Project-III, and has got in-principle approval.
“The AIIB has matured in a short period of time and is rapidly progressing to one of the major infra financiers at the global stage,” Piyush Goyal said, adding the bank president has lauded India for its enthusiasm in putting up good investment proposals.
One of the proposals sent by the government includes financing the Mumbai metro’s line 4, Garg said. The financial capital is regaining its importance and the slew of infra projects, including multiple metro lines, the trans-harbour link, coastal road and a new international airport, will convert the megapolis into the ‘infra capital’ of the country, Goyal said.