Nepal signs AIIB articles of association
HONG KONG, June 30:
Nepal has signed the articles of association of the newly formed Asian Infrastructure Investment Bank (AIIB). AIIB is expected to be a new financer of Nepal's reconstruction in the aftermath of the devastating earthquake of April 25.
Minister for Finance Ram Sharan Mahat signed the 60-point document on Monday amid a ceremony held at the Great Hall of the People in Beijing. Senior delegates from 50 out of the 57 founding countries signed the articles of association at the function.
The bank was established with an initial authorized capital of 50 billion US dollars, with the aim of funding energy, transport and infrastructure projects in Asia. The authorized capital will eventually be raised to $ 100 billion. A given country's share in the bank has been fixed in proportion to the GDP of that country.
Nepal will have a share of 0.08 percent, or $ 89 million (Rs 8.27 billion), in the newly established bank. The bank is scheduled to come into operation within six months. According to the agreement with the bank, Nepal will have to pay 20 percent of its share amount in the coming five years.
AIIB, which was formed under the initiative of China, is expected to become a new investor in Nepal in reconstruction projects. "AIIB will be a new source of concessional loans and grants for Nepal, similar to the Asian Development Bank and the World Bank," Mahat told Republica from Beijing. "But it can't be said that Nepal will be the first country for investment by the bank. The country has to bring proposals that compete with other countries if it is to get the investments," he added.
Parliament should endorse the 34-page articles of association that Finance Minister Mahat will bring back with him. Bangladesh, Maldives, Pakistan and Sri Lanka along with second largest shareholder India are founding members of AIIB from South Asia.
Altogether 37 Asian countries and 20 others are the founding members of AIIB. However, the US and Japan have not taken membership of the bank.
China holds a 30.34 percent share and is the largest shareholder, followed by India (8.52 percent) and Russia (6.66 percent). These three countries will have 26.06 percent, 7.5 percent and 5.92 percent voting rights respectively in the bank. Though China will have the highest percentage of voting rights in the bank, it will not have any veto power.
Source: Republica
