New Delhi: India has applied for a $2 billion loan from the Asian Infrastructure Investment Bank (AIIB) and the Asian Development (ADB) to purchase around 700 million doses of COVID-19 vaccines.
According to news agency PTI, the Manila-based ADB is expected to finance $1.5 billion of the loan and AIIB is considering providing $500 million, the latter’s vice president D.J. Pandian said on Tuesday.
The loan is under consideration from the AIIB board, he said, adding that India had applied for it three months ago. About 667 million doses of COVID-19 vaccines were expected to be procured through the loan, according to the Bank.
He said the vaccines will be purchased by the Government of India through a competitive process and the ADB will be administering the purchasing system and implement it under ADB’s APVAX, or Asia-Pacific Vaccine Access Facility, mechanism.
India, which produces Covishield and Covaxin, recently administered 100 crore COVID-19 vaccine doses to its citizens. India also plans to resume vaccine exports and provide the jabs to a number of countries.
If the loan is sanctioned, India will have to procure vaccines qualified by the World Health Organisation (WHO). While Covishield has received emergency-use listing, Covaxin has not. On Tuesday, October 26, sought “additional clarifications” from Bharat Biotech to conduct a final risk-benefit assessment of the vaccine. The technical advisory group will now meet on November 3 for a final assessment.
According to The Hindu, for a vaccine to be eligible for financing, the ADB mandates that it must “be procured via COVAX [the global vaccine access sharing initiative], prequalified by WHO, or authorised by a Stringent Regulatory Authority”. India’s health authorities do not fall under the Stringent Regulatory Authority category.
Besides funding various infra projects in India, the AIIB has also granted $1.75 billion to India for the COVID-19 relief budget support.
Pandian said the Beijing-based AIIB, in which India is the second-largest shareholder after China, has so far approved 147 projects amounting to $28.9 billion.
Besides being the second-largest shareholder, India has emerged as its biggest beneficiary by obtaining $6.7 billion for 28 projects, he told the media as the bank held its 2021 annual general body meeting through video link.
According to Hindustan Times, government official aware of the development said that multilateral agencies have always provided low-cost funds to their members, particularly developing countries for various developmental projects.
“For example, ADB has set up about a $9 billion vaccine initiative, known as APVAX, which offers equitable support to its developing member countries in procuring COVID-19 vaccines. It is meant for all eligible members, including India. Like any other country, India also gets multilateral fundings for various developmental projects, including funds for healthcare,” the official said.
“Cost of multilateral funding is usually very low, which helps governments to save on their borrowing costs. It is part of the government’s overall resource mobilisation strategy,” the person added.
(With PTI inputs)