The Asian Infrastructure Investment Bank (AIIB) will credit projects in U.S. dollars while attracting capital in other currencies, AIIB President Jin Liqun said Sunday.
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Jan 17, 2016- Nepal has been selected as a board member of the Asian Infrastructure Investment Bank (AIIB), a newly established financial institution which started its operations on Saturday.
“It will also mobilize private sectors to invest in the infrastructure construction.”AIIB will focus on the development of infrastructure with the aim of enhancing Asia’s inter-connectivity and economic integration”.
With an authorised capital of US$100bil, AIIB was proposed as a global multilateral financial institution by Xi in 2013 to finance infrastructure development in Asia, including energy/power, transportation/telecommunications, rural infrastructure/agriculture development, and water supply/sanitation.
It is targeting to lend between $10-$15b year for the first five or six years. Speaking shortly after his election, Jin Liqun said, “I am deeply honored to be elected as the first President of the Asian Infrastructure Investment Bank. Our economy is so underinvested…So, the Asian bank, BRICS and other banks will have a field for investment”, Russian Minister of Economic Development Aleksey Ulyukayev said last summer. Along with soon to be incorporated the New Development Bank of the Brazil-Russia-India-China-South Africa (BRICS) grouping, the AIIB is set to change the dominance of the west in infrastructure financing.
The AIIB, which has 57 founding members, will be based in Beijing. The AIIB was formally launched by Chinese President Xi Jinping at a special function on Saturday.
The AIIB will require projects to be legally transparent and protect social and environmental interests, but it will not force borrowers to adopt the kind of free-market practices favoured by the International Monetary Fund, Reuters had reported sources as saying in September.
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With a 30 percent stake in the bank, which is expected to have $100 billion (92 billion euros) in authorized capital, China is AIIB’s largest shareholder. Before his selection as President-designate, Mr. Jin served as Secretary-General of the Multilateral Interim Secretariat, the entity tasked to prepare the legal, policy and administrative frameworks and undertake other preparatory work required for the establishment of AIIB. “Asia’s financing needs for basic infrastructure are absolutely enormous”, Xi observed. China as largest shareholder under the arrangement has a 26 per cent voting share while India (7.51 per cent), Russian Federation (5.93 per cent) and Germany (4.15 per cent) follow.
