China-sponsored bank Asian Infrastructure Investment Bank (AIIB) approved USD 160 million loan for a power project in Andhra Pradesh, the first credit from the bank for an Indian project.
The AIIB, in which India is the second largest shareholder after China, has approved the project with the objective to strengthen the power transmission and distribution system in Andhra Pradesh, said a bank statement.
The ‘24x7 Power for All’ project is part of Government of India’s ‘Power for All programme’ that was launched in 2014 to provide an efficient, reliable and affordable electricity to all consumers across selected states within five years from the start of implementation.
The project is co-financed by the World Bank. Andhra Pradesh is one of the first states selected for the roll out of the programme. “AIIB supports its members in their transition towards a low-carbon energy mix by promoting the improvement of energy efficiency, such as upgrading the existing transmission and distribution networks,” said Jin Liqun, President of the bank.
“I am delighted that AIIB is working closely with India, who is our second largest shareholder, in energy and other infrastructure sectors, and we expect the Andhra Pradesh — 24x7 Power for All project to be the first of many projects AIIB invests in India,” Liqun said.
The project aims to support Andhra Pradesh by strengthening the transmission and distribution network, increasing network capacity, improving system reliability and supporting operational reforms to improve the commercial performance of the state’s distribution companies, the statement said.
It will directly contribute to the economic development of the State of Andhra Pradesh and India by increasing delivery of reliable, grid-based electricity to households, business and the agricultural sector, it said.
“The Power for All programme in Andhra Pradesh will be the starting point for AIIB to extend its assistance to other countries in Asia moving towards an ‘Energy for all’ initiatives,” said DJ Pandian, Vice President and Chief Investment Officer of the AIIB.
“This aligns well with AIIB’s mandate to promote economic development in Asia by helping build reliable and stable energy distribution systems,” said Pandian, who is India’s nominee in the bank.
The AIIB opened for business last year with 57 founding members and authorised capital of USD 100 billion. China is the largest shareholder with 26.06 per cent voting shares. India is the second largest shareholder with 7.5 per cent followed by Russia with 5.93 per cent and Germany 4.5 per cent.