GoI, AIIB sign US$750mn loan deal for COVID-19

The Government of India and the Asian Infrastructure Investment Bank (AIIB) on June 19 signed a US$750-million loan agreement to support India’s “COVID-19 Active Response and Expenditure Support Programme”

June 19, 2020

The initiative is aimed at strengthening the national response towards the adverse social and economic impact of the COVID-19 pandemic on the poor and vulnerable sections of the society.

The project is being financed by the AIIB and Asian Development Bank (ADB) with a total corpus of US$2.25 billion, of which US$750 million will be provided by AIIB and the rest by ADB.

The current loan will be the second to India from AIIB under its COVID-19 crisis recovery facility following a US$500-million loan for the COVID-19 healthcare systems Preparedness project.

The Government of India has introduced a US$21-trillion (US$277 billion) stimulus package to boost the national economy and aid the most vulnerable people affected by the pandemic.

The Government of India and the Asian Infrastructure Investment Bank (AIIB) on June 19 signed a US$750-million loan agreement to support India’s “COVID-19 Active Response and Expenditure Support Programme.” The initiative is aimed at strengthening the national response towards the adverse social and economic impact of the COVID-19 pandemic on the poor and vulnerable sections of the society. This marks the first-ever budgetary support from the Beijing-based multilateral development bank to India. The current loan will be the second to India from AIIB under its COVID-19 crisis recovery facility following the earlier approved US$500-million loan for the COVID-19 Emergency Response and Health Systems Preparedness Project. The Government of India has already introduced a US$21-trillion (US$277 billion) stimulus package to boost the economy and aid the most vulnerable affected by the pandemic. 

AIIB’s support to India is expected to ensure economic resilience to prevent long-term damage to the productive capacity, including human capital, of India’s economy. The main beneficiaries of the initiative would be families living below the poverty line, farmers, healthcare workers, women, women’s self-help groups, widows, people with disabilities, senior citizens, low wage earners, construction workers, and other vulnerable groups. The project is being financed by the AIIB and Asian Development Bank (ADB) with a total corpus of US$2.25 billion, of which US$750 million will be provided by AIIB and the rest by ADB. The project will be executed by the Department of Economic Affairs, Ministry of Finance, through various line ministries. The pandemic has so far infected nearly 430,000 people in India and claimed over 13,700 lives. The outbreak is also expected to bring an unprecedented slowdown in the economy. 

The funding from AIIB last month, part of a US$1.5 billion joint assistance with the World Bank, aims to cover all States and Union Territories in India, addressing the immediate needs of infected people, at-risk populations, medical and emergency personnel, service providers, medical and testing facilities, among others. The project is targeted to enable the Government to slow and limit the spread of COVID-19 by providing support in enhancing disease detection capacities by scaling up the country’s Integrated Disease Surveillance Programme, hospitals, and laboratories, procurement of PPE, medical devices and medicines. The programme is expected to build a resilient health infrastructure to manage all medical emergencies related to COVID-19 and future disease outbreaks. The funding will also boost research by Indian and global institutions working in collaboration with the Indian Council of Medical Research.