AIIB approves $356.67 mn loan for Chennai metro rail expansion

The Asian Infrastructure Investment Bank (AIIB) has approved a loan of $356.67 million for the expansion of the Chennai metro rail system project.

The Beijing-based AIIB is taking the bank's financing for various projects in India to $6.7 billion, making the country its biggest beneficiary.

The AIIB was established in 2016. It is a multilateral development bank that aims to help the building of infrastructure in the Asia-Pacific region. China is the largest shareholder of the AIIB with 26.06% voting rights. The second-largest shareholder is India with 7.5% followed by Russia at 5.93% and Germany at 4.5% voting rights.

AIIB Vice President for Investment Operations D J Pandian told the media that the Chennai project includes the construction of a new corridor in Chennai's metro network as part of its Metro Rail Phase 2.

The AIIB has so far granted 28 projects in India amounting to $6.7 billion, with this loan, said Pandian.

From the AIIB, the energy and transport sectors have got the highest amount of funding, he said.

The AIIB also granted $1.75 billion to India for Covid-19 relief budget support, which involved aides for social protection and assistance to Micro, Small, and Medium Enterprises (MSMEs), Pandian said.

Pandian said that the Chennai Metro project is aligned with the bank's mandate to promote infrastructure of high-quality and sustainability.

In Chennai, the development and integration of the transport sector will further boost trade and economic growth, he said.

Pandian said that the project will address traffic bottlenecks and lessen greenhouse gas emissions by improving public urban transport options. Its design and construction will have environmentally friendly features to help decrease its carbon footprint.

Pandian said that the project also combines climate change resilience features to decrease its vulnerability to climate-related events.

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