AIIB should strive for innovative financing tools, greater private capital mobilisation: FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Monday said the Asian Infrastructure Investment Bank (AIIB) should strive for greater provision of innovative financial models and scale up efforts for private capital mobilisation. The minister in her meeting with the AIIB delegation, comprising 11 officials of the Board of Directors of AIIB and senior representatives and staff, said India could act as a sandbox for AIIB’s piloting of innovative financing models and technologies.

Sitharaman, who is also Governor on the AIIB Board, stated that the multilateral institution should broaden its investment in priority sectors of climate adaptation and resilience, infrastructure development, energy security, urban development and extend support for India’s next generation reforms, an official statement said.

She also stressed upon the importance of continually incorporating finance plus and budget plus elements in AIIB’s project design and implementation.

“Sitharaman further suggested that AIIB should strive for greater provision of innovative financial tools and models and scale up its efforts for private capital mobilisation and assured the AIIB of India’s full support and cooperation in this regard,” the statement added.

The minister encouraged AIIB to continue participating in the ongoing work on strengthening and reforming MDBs in line with the recommendations of the Independent Expert Group established under India’s G20 Presidency, including the call for MDBs to work together as a system for greater impact and scale.

Sitharaman pointed out that India remains committed to governance reforms in multilateral development banks to ensure that MDBs are ‘fit for purpose’ to address contemporary challenges, while remaining inclusive and responsive to the needs of all members particularly of Low-Income Countries (LICs).
Sitharaman mentioned that India’s experience of digital transformation can serve as a model for other countries seeking to harness digital solutions for inclusive growth and also India’s rich experience of disaster management, which can be of value to several vulnerable economies.

Appreciating the AIIB on its remarkable growth over the past nine years, the minister underlined India’s strong macroeconomic fundamentals and its demonstrated leadership in creating and harnessing the power of digital public infrastructure.

Key purpose of the AIIB Board visit to India is to provide the Board of Directors a holistic insight into the AIIB’s ongoing and planned investments in its member countries and provide an opportunity to engage with the government, private sector and other stakeholders, the statement added.