AIIB Should Consider Expanding Non-Lending Services for Low-Income Nations, Says Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman urged the Asian Infrastructure Investment Bank (AIIB) to broaden its non-lending services, especially for low-income nations. She highlighted the importance of technical and project preparation assistance. The minister also encouraged AIIB to standardise and innovate financial tools while mobilising private sector resources, not just in capital but also in expertise and market-driven strategies.

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During a discussion on resilient infrastructure, Sitharaman emphasised the urgent need for sustainable solutions due to climate change. She pointed out that geopolitical tensions and unsustainable debt are hindering many countries' ability to finance infrastructure projects. This situation places a significant responsibility on AIIB to deliver effective solutions.

AIIB's Role in Infrastructure Development

Sitharaman praised AIIB's client-focused approach and its swift response during the COVID-19 pandemic. She acknowledged its efforts in executing special funds for client outreach and recent climate-focused initiatives. However, she stressed that more needs to be done, as envisioned by the G20, both in terms of scale and impact.

The Finance Minister shared India's experience with large-scale physical infrastructure expansion and digital public infrastructure's multiplier effects. She noted that these elements can drive sustained growth. India is now concentrating on urban infrastructure, e-mobility, and renewable energy to build a resilient future.

India's Contribution and Cooperation

Sitharaman assured AIIB of India's full cooperation and support in leading a transformative journey towards a resilient and inclusive future. She encouraged AIIB to facilitate the transfer of best practices from India and other Asian countries to low-income regions while maintaining its Asian focus.

Earlier, during a meeting with AIIB President Jin Liqun before the 9th Annual Meeting of the Board of Governors in Samarkand, Uzbekistan, Sitharaman appreciated the bank's rapid growth in lending operations over nine years. She suggested that AIIB should continue strengthening its client-centric approach and assist member countries, particularly low-income ones, through technical assistance and other non-financial services.

AIIB's Commitment to Sustainable Development

India is the second-largest shareholder and largest client of AIIB. The AIIB President acknowledged India's contributions to the bank's governance and growth. He expressed interest in exploring further opportunities to strengthen ties with India.

As a multilateral development bank based in Beijing, AIIB focuses on developing sustainable infrastructure in Asia. It aims to promote investments in infrastructure and other productive sectors to foster sustainable economic development, create wealth, and improve infrastructure connectivity.

The Finance Minister reiterated that governors must ensure AIIB delivers on its commitments. She commended AIIB’s efforts but insisted that more work is needed for greater impact as per G20 expectations.