With the Asian Infrastructure Investment Bank (AIIB) board getting ready to hold its third annual general meeting in the city on June 25 and 26, activists have stepped up pressure on the bank to desist from sanctioning $200 million for the proposed $2.1-billion National Investment and Infrastructure Fund (NIIF).
Reviving stalled projects
NIIF is aimed at reviving a host of stalled projects in the country and according to the activists these projects have been ‘shelved because of high social and environmental risks and opposition by local communities’.
In a report called Risky Venture, which was released ahead of the meeting, Bank Information Center Europe and Centre for Financial Accountability-India said, “The AIIB does not have strong enough safeguarding policies necessary to track the projects or sub-investors into which the NIIF will then invest, or to ensure they will cause no harm to local people.”
Kate Geary, the report’s co-author, said, “The World Bank’s International Finance Corporation has been forced drastically to reduce this kind of risky “hands-off” lending via third party financial intermediaries because of human rights and environmental scandals.”
She added, “But the AIIB seems very enthusiastic for it. This investment into NIIF will be its fourth financial intermediary deal, but the bank does not yet have the proper systems to ensure transparency, accountability and supervision down this kind of lending chain. It is vital that the AIIB takes on the lessons learnt from IFC’s hard experience, and avoid its mistakes.”
Co-author Anuradha Munshi said, “India believes the AIIB’s Triple-A credit rating will attract investors into NIIF and unlock its claimed $1.5 trillion infrastructure gap. We fear that the land grabs, forest clearances, livelihood losses and environmental damage that have stalled so many of India’s infrastructure projects could all be back on the table if the AIIB invests in NIIF.”