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AIIB approves USD 150 million loan for Chennai Metropolitan Area project

Another 27 projects worth 5 billion USD in pipeline for India

The Asian Infrastructure Investment Bank (AIIB) has approved USD150 million loan to the Government of India for implementation of the Sustainable Urban services program for Chennai metropolitan area (CMA). AIIB Vice President (Investment Operations), Dr. D.J. Pandian while speaking exclusively to Prasar Bharati Special Correspondent in Beijing said that India is the largest beneficiary of AIIB and the bank has so far approved 29 projects for India worth 6.8 billion USD.

The energy and transport sectors have received the highest amount of AIIB’s financing. Dr. Pandian told another 27 projects worth 5 billion USD are in pipeline for India including Haryana Orbital Railway project which will be a circular railway to national capital Delhi, multi corridor transport project in Mumbai and digital education project in Gujarat.

He further informed that AIIB has given 1.75 billion USD support to India in three projects to assist in fight against COVID-19. Fourth project is co-financed with Asian development Bank for procurement of COVID-19 vaccines in which the AIIB will support with 500 million USD. It’s expected to get approved in December.

Dr. Pandian hailed the leadership of Prime Minister Narendra Modi for India’s infrastructure push. He said, AIIB is committed to strengthen the infrastructure in India. We will work with GOI very closely to spread infrastructure development across the country.
The Chennai Metropolitan Area project is aimed at strengthening institutions and financing for improving the quality and sustainability of selected urban services in the CMA.

It will cover the core urban services, including water resource management, water supply and sewerage, urban mobility, solid waste management, and public health. The total project cost is 701 million USD out of which AIIB and World Bank each will provide 150 million USD each. Rest of the cost will be borne by the Govt. of Tamil Nadu. AIIB in September approved a USD356.67 million loan for the construction of a new corridor in Chennai’s metro network as part of Chennai Metro Rail Phase 2.

The Chennai Metropolitan Area (CMA) is home to around 11 million people and one of the fastest growing metropolitan areas in Asia with its growing economic significance in India. However, Chennai is facing tremendous infrastructure deficits and low service quality in core urban sectors.

It is also highly vulnerable to natural disasters, climate change and also to pandemics as the COVID-19 emergency revealed. Many parts of India have been experiencing extreme weather events due to climate change. The CMA is not an exception. Since October, Chennai has been facing extreme rainfall and flooding. Responsibilities in service delivery in Chennai are also fragmented across jurisdictions and service agencies.

AIIB will finance USD150 million towards the multi-sector urban Program (Chennai City Partnership: Sustainable Urban Services Program) – out of USD150 million, USD87.1 million is accounted for climate adaptation and mitigation finance. The Program will support the Government of Tamil Nadu in realizing its vision of transforming Chennai into a world-class city that is green, livable, inclusive and resilient.

The Program focuses on improving quality and sustainability of selected urban services – water, urban mobility, healthcare, and waste management – emphasizing on bringing sustainable results for its citizens and building long-lasting institutional systems and capacity.

This support, with strong partnership with the experienced partner (the World Bank), also demonstrates the Bank’s relevance and value to its member countries during and post crisis by creating a more sustainable and climate-resilient service delivery model, building Chennai back better and greener.

The Program will complement AIIB-supported urban transport projects, on Chennai Metro Rail (Phase 2, Corridor 4 and 5) and Peripheral Ring Road, by improving integration of public transport modes (in terms of routes, institutions, and technology) and strengthening relevant institutions.

 

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