AIIB Offers New Facility to Reduce Cost of Infrastructure Loans
The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors has approved the creation of a Special Fund Window (SFW) to make its financing more affordable to its less developed members. This is an additional effort by AIIB to further support its less developed members especially by reducing the cost of lending for Infrastructure for Tomorrow (i4t).
The SFW is a blended financing facility that will provide interest rate buy down to eligible sovereign-backed financing projects that are aligned with AIIB’s Corporate Strategy and identified according to AIIB’s regular rigorous investment process.
“Infrastructure investments and connectivity are crucial for lower-income countries to regain a growth momentum and to achieve long-term sustainable development goals in the post-COVID-19 era, while also dealing with climate change,” said AIIB President and Chair of the Board Jin Liqun. “Through the SFW, AIIB can support its less developed members with affordable pricing while still being consistent with the core elements of our business model to finance i4t. Although modest in scale, we are glad to be able to complement other multilateral development banks by bringing much needed additional financing to lower-income members.”
“Our Corporate Strategy commits to broadening the range of clients AIIB can support, with particular focus on our less developed members,” said Sir Danny Alexander, AIIB Vice President for Policy and Strategy. “For the first time, with the support of donors, this new facility will enable AIIB to offer more affordable loan pricing to these members. Combined with our Project Preparation Special Fund which makes grants to support the preparation of high quality projects, we hope this new facility will help meet the needs of our less developed members and global efforts to support sustainable development and tackle climate change.”
AIIB has made gradual efforts to expand its offering to less developed members, including through AIIB’s Project Preparation Special Fund. In 2020 and in response to the pandemic, AIIB created a Special Fund Window under the COVID-19 Crisis Recovery Facility offering an interest rate buy-down mechanism for financing extended to less developed members. The new SFW will build on the experiences gained and further extend AIIB’s financing to these members.
The SFW includes unique features that demonstrate innovation in the field of blended finance. It will be funded by voluntary contributions from AIIB’s members. Decision-making authority will reside with AIIB’s existing multilateral governance structure, and the SFW will operate according to the rules and regulations approved by AIIB’s Board of Directors. For operational efficiency reasons, the SFW implementation will be fully incorporated into AIIB’s regular investment process.
Projects under the SFW would contribute to supporting AIIB’s Corporate Strategy priorities and targets. AIIB’s Corporate Strategy (2021-2030) combines the Bank’s firm commitment to sustainability with a clear operational focus on (1) Green Infrastructure, (2) Connectivity and Regional Cooperation, (3) Technology-enabled Infrastructure and (4) Private Capital Mobilization. It sets targets on climate financing (50 percent of actual financing approvals by 2025), cross-border connectivity (25-30 percent of actual financing approvals by 2030) and private sector financing (50 percent of total approved financing by 2030).
Sri Lankans flee to India to escape country's worst economic meltdown
With Sri Lanka staring at an unprecedented economic crisis, the refugee flow to Tamil Nadu has commenced after 16 Sri Lankan nationals reached the shores of the state, The Economic Times reported.
On Tuesday, the refugees arrived in Tamil Nadu in two batches.
While six people, including a family of a man, wife and their 4 month-old son and a woman and her six and twelve year old children arrived on Tuesday afternoon, the rest arrived late at night.
In Sri Lanka there is a high financial crisis with prices of essential commodities, including milk and rice skyrocketing, petrol and diesel not available and power stations shut. Schools are not holding examinations due to lack of paper for printing question papers.
It may be noted that the Civil war in the early 1980's triggered an inflow of people from Sri Lanka and now around 60,000 refugees are living in 107 camps spread across Tamil Nadu and about 30,000 more live outside these camps or in general society, according to The Economic Times.
The first batch of six refugees who arrived in the state have been identified as R. Gajendran (24), his wife Mary (23) and their four-month-old son Nijath. Dony Ariston (31) and her two sons, Esther (12) and Moses (6) also accompanied Gajendran's family. Dony has left behind her husband in Sri Lanka while traversing to India as a refugee.
Interacting with reporters at Madurai, Gajendran and the two women said that they don't have any jobs in Sri Lanka and essential commodities were not available while blackmarket prices were unaffordable. They also said that long ques can be seen in fuel stations.
They also said that they had paid an amount of Rs 50,000 to a boatman who had dropped them early morning of Tuesday at a sand dune near Rameswaram and were later rescued by the Indian coast guard. Ten other people also reached Tamil Nadu late evening of Tuesday but their details were not available, The Economic Times reported.
Police sources told IANS that the refugees would be produced before a court in Ramanathapuram on Wednesday.
Crisis-hit Sri Lanka sends troops to fuel stations, aims to restructure debt
Sri Lanka posted soldiers at hundreds of state-run gas stations on Tuesday to help distribute fuel after a sudden rise in prices of key commodities and accompanying shortages forced tens of thousands of people to queue for hours, Reuters reported.
The Indian Ocean nation is battling a foreign exchange crisis that forced a currency devaluation and hit payments for essential imports such as food, medicine and fuel, prompting it to turn to the International Monetary Fund (IMF) for help.
"The government has to provide solutions," said Seetha Gunasekera, 36, who lives with her husband and two children in Colombo, the capital.
"There is too much hardship and suffering," added Gunasekera, who said she was spending more time in fuel queues than doing anything else.
"Prices of everything have increased and we are barely able to manage with what we earn daily."
The decision to deploy troops near petrol pumps and kerosene supply points came after three elderly people dropped dead during their wait in long queues, officials said, according to Reuters.
It was a response to complaints of stockpiling and inefficient distribution, said government spokesman Ramesh Pathirana.
"The military has been deployed to help the public, not to curtail their human rights," he added.
TWO SOLDIERS AT EACH PUMP
Military spokesman Nilantha Premaratne told Reuters at least two army personnel would be stationed at every fuel pump to help organise fuel distribution, but the soldiers would not be involved in crowd control.
Tension over the scarcity of supplies has fed sporadic violence among those scrambling to buy fuel and other essential items.
Police said a man was stabbed to death on Monday in an argument with the driver of a three-wheeled vehicle, while last week three elderly men died queueing for fuel in sweltering heat, Reuters reported.
The rapid drain of Sri Lanka's dollars has left it struggling to pay for critical imports as currency reserves have slumped 70% in the last two years to $2.31 billion.
But Sri Lanka has to repay about $4 billion in debt in the rest of this year, including a $1-billion international sovereign bond that matures in July.
Ahead of IMF talks in Washington in April, the government said it would hire a global law firm to provide technical assistance on debt restructuring to fight the crisis, according to Reuters.
Budget bungle halts provincial hall construction
Construction of the Madan Bhandari Memorial Assembly Hall in Triyuga Municipality in Udayapur district has stalled over flawed budget estimation.
The project was commissioned to Rabina Joshi-Pabitra Joint Venture for around Rs 240 million in 2017. But the contractors claim the projection was a heavy underestimation, forcing it to abandon work halfway.
The estimate for the proposed assembly hall was done in haste, leading to a budget shortfall of around Rs 300 million.
“The work that could be done with the available budget has been completed. But there is still a lot more to do,” says Kedar Dahal, a contractor. “How do you expect timely completion when the estimate fell by a third of the actual required budget?”
Project engineer Niraj Karn says they had informed of the cost estimate error to the office of Urban Development and Building Construction in Rajbiraj, Saptari, but to no avail.
“The office admitted to the error, but didn’t take any further steps,” he says. “We are yet to install slabs and trusses for the roofs of five blocks. The visitors’ hall, fence and garden also remain unfinished.”
The project developers have already written to the urban development office, notifying of their plan to vacate the project site. They have also mentioned in their notice that electricity fixtures cannot be installed without first fixing the slabs.
Sachindra Kumar Dev, the chief of the urban development office, says most of the work has been completed in line with the agreement.
“Only a few things remain and they can also be completed soon with a new variation order,” he says.
The variation order will have to be approved by the Secretary at the Ministry of Urban Development. Dev says his office has already written to the ministry for the approval of the variation order up to 25 percent of the project cost.
The building complex was designed to hold up to 2,000 people at a time, with one large and one small hall, visitors’ hall, staff quarter, disabled-friendly restrooms, underground parking and garden.
The project, announced in fiscal 2015-16, is part of the federal government’s ‘smart city’ campaign for 25 municipalities across the country.
“The goal was to build provincial-level assembly halls and bus terminals of international standard,” says Manju Kumari Chaudhary, a former state minister for urban development. “But subsequent governments have neglected the campaign.”
