India plans new bank to support $1.5trn infrastructure revamp
India is looking into the creation of a new bank to support the country’s ongoing infrastructure projects.
According to Economic Times of India sources, the announcement of a new bank is likely to occur in February.
The new bank is expected to hold equity capital of $13.7 billion. It will merge with the existing India Infrastructure Finance Company (IIFCL).
IIFCL, wholly owned by the Indian government, currently provides long term finance to infrastructure projects across sanitation, communications, and energy.
The government is funding the new bank for the first stages of its life, before opening it up to external investors.
Prime minister Narendra Modi plans a $1.5 trillion programme to revamp India’s road and rail network over the next five years.
His country is bracing for its biggest economic contraction since 1952, and its first since 1980. Data from India’s statistics industry indicates a GDP shrink of 7.7% for the year ending March 2021.
Despite installing strict coronavirus lockdown measures, the country has the world’s second-highest rate of virus infections at 10.4 million people.