Indian states such as Maharashtra and Bihar, where proposed infrastructure projects are plenty, the Asian Infrastructure Investment Bank (AIIB) is still to emerge as a preferred lender, as cost of debt and ability to lend big loans remain a concern.
“When AIIB Vice-President Danny Alexander came to me to discuss the flow of this meeting, I handed him a list of projects and he was kind enough to tell our bank is not as big as you think that we can handle these many projects, “Maharashtra Chief Minister Devendra Fadnavis said, replying to questions at the end of a panel discussion with chief ministers during the AIIB meet on Monday.
The interest rates are high at 9 to 9.5 per cent, Fadnavis said on the sidelines of the conference. The state will still look to AIIB for some projects for funding, but will look to negotiate on the interest rates, he added.
Others like Bihar are still evaluating AIIB as an option to fund their growing need for infrastructure financing. “We have not gone to AIIB, because we are already getting loans from ADB and World Bank and other organizations. We have now come to know of this bank and we will go into the details,” Bihar Deputy Chief Minister Sushil Kumar Modi said.