AIIB members ink agreement; bank to offer loans with no strings
02 September 2015
Fifty of the 57 founding members of the Asian Infrastructure Investment Bank (AIIB) on Monday signed the articles of agreement for the formation of the infrastructure bank, aimed at borrowing woes of the emerging economies.
The signing ceremony took place in Beijing at the Great Hall of the People. The remaining seven founding members are expected to sign the agreement before December 2015.
The bank will be headquartered in Beijing, and will have an initial authorised capital stock of $100 billion. Regional members will be the majority shareholders of the bank, holding approximately 75 per cent of shares.
The AIIB is expected to focus on the infrastructure development in Asia, and unlike the existing International Monetary Fund (IMF) and World Bank, is unlikely to restrict lending on political considerations.
The AIIB will offer loans with fewer strings attached than the World Bank, as Beijing seeks to change the rules of global development finance set by western lenders.
The AIIB will require projects to be legally transparent and protect social and environmental interests, but will not ask borrowers to privatise or deregulate businesses for loans, sources said.
''The bank's foundation will be built on international best practices and the lessons and experiences of existing multilateral development banks and the private sector,'' the statement said.
China's new international development bank will offer loans with fewer strings attached than the World Bank, sources said, as Beijing seeks to change the unwritten rules of global development finance.
The Asian Infrastructure Investment Bank (AIIB) will require projects to be legally transparent and protect social and environmental interests, but will not ask borrowers to privatise or deregulate businesses for loans, four sources with knowledge of the matter said.
Beijing will take particular care not to insist on some free market economic policies recommended by the World Bank, including some of those unreasonable demands on borrowers.
The AIIB is expected to become operational by the end of the year.