KATHMANDU: Finance Minister Ram Sharan Mahat is leaving for China on Sunday to put initials on the statute of the China-led Asian Infrastructure Investment Bank (AIIB), a multilateral development bank, which, once established, would open another avenue for Nepal to acquire soft loans for development purpose.

Nepal had signed memorandum of understanding (MoU) to become a founding member of the bank on October 24, 2014. The MoU was signed by Minister Mahat in the Chinese capital of Beijing.

At that time, 21 other countries had also signed the MoU to formally accept membership of the AIIB.

Since then, representatives of various countries that expressed interest to become a founding member of the AIIB have held five rounds of meetings in Kunming (China), Mumbai (India), Kazakhstan, Beijing (China) and Singapore. These chief negotiators’ meetings were held to finalise the content of the bank’s statute, which is officially known as Articles of Association (AoA).

“The AoA has now been finalised and Minister Mahat would put his initial on it on Monday. The signed document will then have to be ratified by Parliament by December. Nepal will then formally become the founding member of the bank,” said Prem Upadhyay, undersecretary at the Ministry of Finance.

As of now, 57 members, including Nepal, have expressed interest to become founding members of the AIIB. Many of these countries are from Asia, but countries such as Germany, the UK and South Africa have also expressed interest to become founding members of the bank.

The idea of opening the AIIB was first floated by Chinese President Xi Jinping and Prime Minister Li Keqiang during their visits to Southeast Asian countries in October 2013.

Following these announcements, bilateral and multilateral discussions and consultations were held on core principles and key elements of the AIIB.

The bank, which is expected to have an authorised capital of $100 billion, will function more or less like other multilateral lending institutions like the World Bank and the Asian Development Bank.

The bank, which is expected to come into operation by the end of 2015, will focus on the development of infrastructure and other productive sectors in Asia, including energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics, among others, says the bank’s website.