Beijing-based Asian Infrastructure Investment Bank ( AIIB) confirmed on Wednesday that it will help the Indian government in its fight with the adverse consequences of COVID-19 in poor and vulnerable households and that it has approved a US$ 750 million (around Rs 5,714 Crore) loan to India.
The multilateral agency said in a statement, “Co-financed with the Asian Development Bank, the budgetary support will go toward bolstering economic aid for businesses, including for the informal sector, expanding social safety nets for the needy, and strengthening the country’s health care systems.”
India is very vulnerable to the pandemic, with some 270 million people still living below the national poverty line and nearly 81 million in densely populated informal settlements with restricted access to healthcare, the World Bank said.
In the meantime, India reported a peak of 2,003 COVID-19 related deaths on Wednesday, taking the total number of fatalities to 11,903. A total of 10,974 new coronavirus cases raised the caseload to 3,54,065, based on the data from the Union Health Ministry.
AIIB said, “The disruption in economic activities threatens to impact poor households disproportionately, especially women, many of whom are employed in the informal sector.”
“Many of the world’s low and middle-income countries are still in the early stages of the health crisis but are already feeling the impact of the pandemic. This poses an enormous risk for millions across India who have only recently emerged from poverty,” according to AIIB Vice President, Investment Operations, D J Pandian.
India’s funding is also aimed at ensuring economic stability to prevent long-term harm to the country’s economic resources, including human capital, Pandian said.
The AIIB’s total approved sovereign lending to India amounts to US $3.06 billion, which includes a recent COVID-19 emergency response of US $500 million.
This loan is the second in the Crisis Recovery Facility (CRF) of the AIIB for India. While AIIB has no regular policy-based financing instruments, the Bank has extended such financing to support its members under the CRF on an exceptional basis, through co-financed projects with the World Bank or the Asian Development Bank.
According to the statement, AIIB is currently examining its member’s projects. AIIB started operations in January 2016 and now has 102 internationally approved members.