AIIB approves $150 mn to support multi-sector programme in Chennai
The funds will increase the resilience of Chennai, transforming the city into a green, livable, competitive and resilient capital
image for illustrative purpose
Mumbai: Tamil Nadu government is transforming its capital of Chennai into a city that is green, livable, competitive and resilient, and the Asian Infrastructure Investment Bank (AIIB) is lending a hand in line with its mission to finance green and resilient Infrastructure for Tomorrow (i4t).
AIIB has approved the $150-million "Chennai City Partnership: Sustainable Urban Services Program" that aims to strengthen institutions and improve the quality and financial sustainability of selected urban services in Chennai.
The southern State is an economic powerhouse and is one of India's most urbanised states. Chennai dominates the state's demographic and economic landscape and is experiencing rapid physical growth and changes in its boundaries.
However, Chennai faces tremendous infrastructure deficits and low service quality in core urban sectors such as water resource management, water supply and sanitation, urban mobility, solid waste management and public health.
"AIIB is adapting and innovating constantly to deliver investment solutions that overcome the challenges our members face," said DJ Pandian, VP, Investment Operations (Region 1). "In this case, we are helping India to increase their resilience and meet their objectives even during the most difficult times."
"We envision this project as a first-phase engagement and a building block for AIIB's long-term partnership with India and in this particular case, Chennai, by supporting the government's program of expenditures," he added.
"As a subset of the overall government program, this financing will cover core urban services and is aligned with AIIB's mandate, thematic priority to promote green infrastructure, and sustainable cities strategy."
Aside from urban infrastructure delivery gaps, Chennai has operating frameworks that focus on infrastructure asset creation rather than on service delivery performance in terms of coverage, quality, sustainability and resilience.
Sustainable financing frameworks are also lacking, with very low own-source revenue generation, excessive and unsustainable reliance on the state government for input-based budget allocations and operating subsidies.
Chennai is also highly vulnerable to natural disasters, climate change and pandemics, as demonstrated by the Covid-19 emergency. The crises induced by the pandemic have highlighted the need for better services as well as limitations of current delivery models.
The pandemic created the momentum for Tamil Nadu to pivot toward sustainable infrastructure delivery and building back better and greener. The programme will complement AIIB-supported urban transport projects—such as the Chennai Metro Rail (Phase 2, Corridors 4 and 5) and others.
"AIIB's mission is to finance i4t—green infrastructure with sustainability, innovation and connectivity at its core," added Pandian. "We are fully supporting our member - India, in their mission to increase the resilience of Chennai and transforming the city into a green, livable, competitive and resilient capital."
