(L-R) Vice President & Corporate Secretary, Asia Infrastructure Investment Bank Danny Alexander and Department of Economic Affairs Secretary Subhash Chandra Garg at a press conference regarding the 3rd Annual Meeting, in Mumbai yesterday
The Asian Infrastructure Investment Bank (AIIB) is likely to invest USD 200 million in a fund of funds set up by India to take interest in infra projects, a top government official said here yesterday.
Economic affairs secretary SC Garg said there will be a leverage of 10-12 times on the original investment, which can result in up to USD 2.4 billion flowing into infrastructure projects.
"Today the AIIB board is approving a project... They are investing USD 100 now and USD 100 million in the time to come. The USD 200-million will flow into the NIIF (National Investment & Infrastructure Fund) that we have set up," Garg told reporters on the eve of the AIIB's two-day annual summit being held here.
This is the first time that the country is hosting the annual summit of AIIB, which will be addressed by Prime Minister Narendra Modi on Tuesday.
"With this kind of a vehicle utilised, it will be possible to multiply the investment in infrastructure to a large multiple," Garg added.
The finance ministry official also said the AIIB investment will be in a fund of funds, hinting that it will be different from the master fund closed recently.
When asked if the investment quantum is low, given that the projected corpus of the NIIF is USD 6 billion, Garg replied in the negative, and pointed out that the investment made by the Abu Dhabi Investment Authority was also of USD 250 million only.
AIIB vice-president Danny Alexander said the multilateral bank is also interested in the fund of funds as it will lead to a higher inflows into the infra sector.
The 2016-incorporated AIIB has approved USD 4.4 billion investments in the country, including USD 1.2 billion in its second largest shareholder after China, making the country the largest beneficiary so far.
The bank has a pipeline of USD 1.9 billion in six projects and Alexander said it is interested in projects in the transport, energy, water and waste management areas in the country given the large requirements in these sectors.