$2 BILLION LOAN PROCESSED TO INDIA BY ADB & AIIB FOR COVID-19 VACCINES

To make the whole nation immune against Covid-19, India has applied for loans from Asian development Banks, ADB, and AIIB. The estimated amount to be received under the application is $2 Billion for procuring approx 667 million Covid-19 vaccines to vaccinate as many as 317 million people in over 19 states. Apart from this $2 Billion, India is also putting down $58 million for the project.

The Beijing-based AIIB was established in 2015 with 57 member countries, India and China being the biggest stakeholders among others. The AIIB will supposedly lend $500 million. Rest 1.5 Billion will be supplemented by Manila-based ADB, in which Japan and USA are the biggest stakeholders, as per a statement of AIIB’s President D.J. Pandian. Japan and USA, though, are not members of AIIB, are the biggest stakeholders of ADB. Both the loans will be provided under the $ 9 Billion Asia Pacific Vaccine Access Facility (APVAX) scheme, started in December 2020 by ADB. This scheme is an initiative by ADB to facilitate support to developing countries who are members of ADB for effective and safe procurement of Covid-19 vaccines to combat the pandemic.

As per Pandian, India had applied for the loan three months ago and the same is under consideration of the AIIB board. The vaccines will be bought by India under the supervision of ADB’s APVAX, which will regulate the purchasing system and implementations.  However, the vaccines procured from these loans must be prequalified by WHO. Covishield is one of the qualified vaccines from WHO’s list, and Covaxin is not yet approved, the final decision for which is scheduled to be on the 3rd of November.

Out of 147 AIIB approved projects, India has received loans for 28 projects amounting to $6.7 Billion. 1.75 Billion of all received loans is for the COVID-19 relief budget support and others for infra-projects. Significantly, earlier the AIIB has formally granted USD 356.67 million loans for the expansion of the Chennai metro rail system. The bank is also considering several other infrastructure projects for the development of Chennai city and its suburbs.

As per the government officials, such loans procurement is usual and India is just using resource mobilization strategy as it will reduce borrowing costs which is very low for multilateral fundings. These low-cost funds are for every member country and India being a member is certainly eligible for it.

Recently, India has achieved the milestone of administering 100 crores vaccines to Indians to fight the deadly virus and also exported the vaccines to 95 countries under the Vaccine Maitri scheme. Approval of the loans will be a piece of good news to India and after getting the loans, more citizens would be vaccinated and India will also be able to resume its exports of vaccines to many countries.