Beijing-based Asian Infrastructure Investment Bank (AIIB) has approved $1.5 billion in loans to India for infrastructure-related projects in 2018, a senior official of the AIIB said on Tuesday.
China plans to invest more than $100 billion through its Belt and Road scheme to build highways, rail lines, ports and other infrastructure linking Asia, Europe and Africa.
The funds would be used for investment in India’s energy, roads and urban development projects, and the bank will examine allotting more funds for such projects next year, D.J. Pandian, AIIB’s chief investment officer, said.
AIIB’s loans include a $200 million commitment to India’s National Investment and Infrastructure Fund to spend on roads, housing and urban development, and the bank will let the Indian government decide how to use that money.
Energy-related projects will primarily be focused on renewables, Pandian said, without providing additional details.
China-backed lenders are taking a more hands-off approach to overseas development financing, unlike western banks whose financing often comes with social and environmental strings and strengthens the voice of non-profits.
AIIB wants to encourage the transition to renewable energy but is not against investments in coal-related projects, unlike most of its peers who have campaigned against further investments in coal.
Any foreign investment in renewables is crucial for India, which needs at least $125 billion in investments to complete its ambitious target of adding 175 GW in clean energy by the end of 2022.