The Asian Infrastructure Investment Bank (AIIB) has approved $575 million in loans to two urban infrastructure projects in India as part of its efforts to ramp up investments in the country.
It is extending a credit line of $500 million to Mumbai’s suburban railway network and a $75-million loan to Tata Cleantech Capital Ltd, AIIB chief investment officer DJ Pandian said on Friday. The projects were approved by the AIIB board in October.
This brings the total AIIB investment in India to $3 billion, Pandian said.
The bulk of AIIB’s investments in India are in the form of loans. However, out of $3 billion, about $250 million is in the form equity investments in two funds. It has invested $100 million in equity in the Indian government-led National Investment and Infrastructure Fund and $150 million in Morgan Stanley-sponsored India Infrastructure Fund.
AIIB has also committed $50 million to an infrastructure investment trust floated by Oriental Structures, it said.
“Equity [investment] takes time. We have to identify the sub-projects and those projects have to be evaluated,” Pandian said. AIIB will mostly look at making equity investments via funds, he said.
AIIB is evaluating various other loans for infrastructure projects including a large power transmission project in Assam and a waste-to-energy project for Karnataka’s rural water supply system. Nearly $1 billion worth of infrastructure projects may go to Assam, Pandian said.
The loan for the Mumbai suburban railway project, which will help connect Mumbai with its peripheral areas, has a tenor of 20-25 years, though it can extend up to 35 years.
The loan is priced at LIBOR plus 0.75% to 1.4%, depending upon the maturity, Pandian said, referring to the London Interbank Offered Rate.
