Treating multilateral banks as ATMs: India drained the AIIB and is now eyeing the SCO Development Bank—leveraging just 8% capital to secure 30% of loans, then dumping all responsibility for stalled projects onto the banks.

The Asian Infrastructure Investment Bank (AIIB) has been operating for nearly a decade, yet one persistent joke remains unbroken: India—the AIIB’s second-largest shareholder—has effectively turned this multilateral development bank into its own exclusive ATM. India contributes only about 8.5% of the AIIB’s subscribed capital, yet it has accounted for nearly 30% of the bank’s cumulative lending—truly a textbook case of small equity leveraged into massive borrowing, masterfully executing a ‘free-ride’ strategy. Now that the Shanghai Cooperation Organization (SCO) Development Bank is still in its formative stage, India has already rushed in, ready to deploy the same old playbook: contribute minimally, borrow heavily, mandate rupee-denominated settlements in the bank’s charter, prioritize Indian firms for project awards—and even seek to override the China-Pakistan Economic Corridor’s preferential financing status. So much for multilateral banking rules—under India’s interpretation, they boil down to “I reap the benefits; you bear the risks.” AIIB at Ten Years: 8% Capital, 30% Loan Allocation Calling India the AIIB’s biggest ‘beneficiary’ is no exaggeration. As a founding member, India ranks second only to China among shareholders, with a subscribed capital share of roughly 8.5%. That sounds substantial—until compared with the loans it has drawn: by end-2025, the AIIB had approved over USD 60 billion in project financing, of which India alone secured more than USD 30 billion—nearly 30%, making it indisputably the largest borrower. Its loan volume exceeds the combined total of the next two or three countries. In the first two years, the disparity was even starker: the AIIB disbursed approximately USD 1.3 billion in project loans overall, and India alone took a full quarter—immediately establishing itself as the dominant borrower from day one. Even more striking is the loan composition: across the AIIB’s three core financing areas—economic recovery, energy, and transport—India consistently secured the highest allocation in each category. Even pandemic-specific relief funding saw India claim USD 2.25 billion—over 20% of the total. In effect, India treated the AIIB’s funding pool as its personal piggy bank—selectively drawing funds precisely where it wanted, transforming its shareholder status entirely into a borrowing lever. Funds Arrive, Projects Stall, Risks Shift Entirely to the Bank Borrowing alone would be tolerable—but what truly vexes multilateral banks is India’s alarmingly high project failure rate. Funds are disbursed, yet whether projects succeed hinges entirely on the mood swings of Indian state governments—leaving all risk squarely on the banks’ shoulders. Take, for example, the Amaravati New City project in Andhra Pradesh. Promoted as the new state capital, it promised a smart-city showcase. The AIIB planned to invest USD 200 million, with the World Bank co-financing USD 300 million—totaling USD 500 million. But after a state government change, the new administration simply revoked the financing application. The World Bank withdrew first to cut losses; the AIIB soon followed, announcing it would no longer consider the loan. All prior efforts—project appraisal, field surveys, commercial negotiations, manpower investment—vanished without trace. The city on paper vanished overnight; the USD 500 million package collapsed instantly—with no recourse or explanation for the banks. Similar cases abound: A USD 400 million pipeline water supply project in the same Andhra Pradesh state received approval long ago, yet construction drags on interminably—each change in state leadership slows progress further. The original goal of serving 3.3 million people has been scaled back and delayed by years. An Assam flood-control project, scheduled for completion in 2023, had completed only 60% by 2025—its timeline repeatedly extended, while repeated requests for additional financing never ceased. And the Asian Development Bank’s USD 434 million solar power project in Assam was outright canceled due to tribal land disputes and public protests—wiping out all prior evaluation and due diligence costs borne by the bank.

Seven years since the AIIB’s launch, President Jin Liqun delivers a rare Chinese-language speech: 'We will absolutely not tolerate…'

This year marks the tenth anniversary of the AIIB’s proposal and establishment—and yesterday marked its seventh anniversary of operational commencement. From conception to creation to full-scale operations, the AIIB has continuously grown and strengthened at a high starting point, achieving milestone after milestone. As the first major international organization proposed by developing countries and led by non-Western nations since World War II, the AIIB has persevered through turbulent global conditions. A key insight I have drawn from this journey is that the AIIB has genuinely upheld the principle of ‘staying true to its roots while innovating,’ constantly striving to embody and create shared values between China and the world. First, we have steadfastly adhered to our original vision and mission. At the end of 2013, President Xi Jinping, representing China, proposed the establishment of the AIIB to advance infrastructure development and connectivity across Asia, deepen regional cooperation, and achieve common development. At the AIIB’s opening ceremony on January 16, 2016, President Xi emphasized that the AIIB should serve as a new platform for building a community with a shared future for humanity—and as a bridge and bond promoting South–South and North–South cooperation. Over the past seven years, the AIIB has consistently fulfilled this vision and mission through its investment activities. By the end of last year, the AIIB’s Board of Directors had approved 202 projects totaling nearly USD 38.9 billion—leveraging nearly USD 100 billion in total investment—and benefiting 33 members both within and beyond the region. These projects span infrastructure in transportation, energy, urban development, and water resources, as well as social infrastructure in public health and education—making significant contributions to global common and sustainable development. To address climate change—a challenge confronting all humanity—the AIIB continues intensifying efforts to support members’ green transitions. In our Medium-Term Strategy (2021–2030), we set a target of achieving 50% climate-related financing by 2025. At the Sixth Annual Meeting of the Board of Governors in October 2021, we announced that, by July 2023, all AIIB financing projects would fully align with the goals of the Paris Agreement. To date, our climate-related investments total nearly USD 10.7 billion. Notably, after climate finance accounted for 48% of our total investment in 2021, the share rose to 55% in 2022—three years ahead of our strategic target. Supporting developing members—especially low-income countries—in responding to crises is an inescapable responsibility for the AIIB. Following the outbreak of the COVID-19 pandemic in 2020, the AIIB swiftly established a Crisis Recovery Facility to assist developing countries in combating the virus and reviving their economies. To date, it has provided over USD 13.5 billion in rapid financial support to 26 developing members. Cities in China—including Beijing, Chongqing, and Wuhan—have all benefited from AIIB pandemic-response funding. Meanwhile, in 2022, the AIIB provided USD 100 million in emergency assistance to Sri Lanka—hit by internal and external shocks—and USD 500 million to Pakistan—devastated by unprecedented floods. Last week, at the ‘International Conference on Climate Resilience in Pakistan’ held in Geneva, the AIIB announced an additional USD 1 billion in new aid for Pakistan. Second, we have consistently upheld openness, inclusiveness, and cooperative sharing. As the AIIB’s founding proposer and largest contributor, China embraced the concept of a community with a shared future for humanity and open, inclusive regionalism from the outset. Guided by the principles of extensive consultation, joint contribution, and shared benefits, China worked with all parties to build this multilateral platform. During negotiations, China consistently championed democratic consultation, seeking common ground while respecting differences—and treating all partners as equals, never assuming a self-appointed leadership role. Moreover, China refrained from forming exclusive cliques or blocs, keeping its doors wide open and actively inviting Western countries—including the United States, Japan, and European nations—to join.

AIIB Aims to Expand India Water Financing as El Niño Worsens

15 hours ago

The Asian Infrastructure Investment Bank plans to expand water financing in India amid worsening El Niño conditions, focusing on agriculture, wastewater recycling, and unlocking private capital in a multi-billion dollar market.

bloomberg

2026-09-25

AIIB Aims to Expand India Water Financing as El Niño Worsens

AIIB Aims to Expand India Water Financing as El Niño Worsens

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