The Asian Infrastructure Investment Bank (AIIB) has lent US$329mn to Gujarat, a state in India.

The money will be used to improve local infrastructure, through the construction of access roads which will connect 4,000 villages in 33 state districts.

It marks the third financing for India the AIIB has launched in recent weeks. In June, it announced an equity investment of US$150mn for infrastructure projects, while later in the same month it pledged a US$160mn debt facility for a power and distribution project in the state of Andhra Pradesh.

Despite clashing with China on the funds from its One Belt One Road initiative funding Pakistani developments in territory that is disputed by India, India has been actively involved in the first 18 months of the AIIB’s operations.

India is the second-largest shareholder at the development bank, holding 8,367.5 out of 100,000 total shares. AIIB president Jin Liqun has been keen to downplay the impact of a diplomatic dispute between China and India, which stems from China’s support for the China-Pakistan Economic corridor, which passes through disputed Kashmir.

“I am delighted that the AIIB is working closely with India, who is our second-largest shareholder, in energy and other infrastructure sectors,” he said at the time of the Andhra Pradesh lending. “The AIIB supports its members in their transition toward a low-carbon energy mix by promoting the improvement of energy efficiency, such as upgrading the existing transmission and distribution networks.”

On the announcement of the financing in Gujarat, home place of Indian Prime Minister Narendra Modi, the AIIB released a statement saying: “Insufficient road connectivity into these villages limits their ability to access healthcare services, bring their goods to market and access transportation for their children to attend school. This project will construct and upgrade district and farm-to-market roads for the villagers and provide approaches to educational institutions, schools and hospitals.”