Finance minister to attend inaugural meeting of AIIB
Kathmandu, January 12
Finance Minister Bishnu Prasad Paudel is leaving for China on Thursday to attend the first meeting of the Board of Governors of the Asian Infrastructure Investment Bank (AIIB), a new China-led multilateral development bank, which will finance infrastructure projects in Asia.
The inaugural meeting of the AIIB will continue from January 16 to 17. During the meeting, founding member countries from around the globe will announce commencement of the operation of the $100-billion AIIB, which is expected to approve the first lot of projects in the second half of 2016.
The meeting of the Board of Governors will also elect AIIB’s board members and the president. Currently, Jin Liqun, China’s former vice minister for finance, is serving as president-designate of the AIIB. He is expected to be elected as AIIB’s first president during the board of governors meeting.
Finance Minister Paudel is scheduled to meet Jin on January 17, according to Mohan Chapagain, finance minister’s press secretary.
During his stay in China, Minister Paudel is also expected to meet with Chinese finance and commerce ministers.
“Our ambassador in China is trying to fix appointments for those meetings, but nothing has been confirmed yet,” Chapagain said.
“If Paudel is able to meet with Chinese finance and commerce ministers, he will discuss various bilateral issues and seek the Chinese government’s support in development of energy and infrastructure sectors.”
The meetings — if they take place — will also set the tone for Prime Minister KP Sharma Oli’s proposed visit to China, Chapagain added.
Nepal had formally become one of the founding members of the AIIB on June 29 after former finance minister Ram Sharan Mahat put the initials on the AIIB charter — officially known as the Articles of Agreement (AoA).
The AoA has so far been signed by 56 countries, making them founding members of the AIIB. The AoA came into force on December 25. Nepali Parliament ratified the AoA in late December.
Nepal has acquired 809 units of shares, or 0.081 per cent stake, worth $80.9 million in the AIIB — which will provide another window for the government to acquire cheap foreign credit to finance development projects.
Nepal, however, does not need to chip in the entire $80.9 million up front, as the AIIB has divided authorised capital stock into paid-in shares and callable shares.
The bank has authorised capital stock of $100 billion. Of this, $20 billion has been identified as paid-in shares — which have to be paid in instalments of five to 10 years depending on economic condition of countries — and the rest, $80 billion, has been classified as callable shares, which have to be paid in during extraordinary circumstances whenever AIIB members make a call.
This means Nepal will have to make capital subscription of $16.18 million to become founding member of the bank.
This amount can be paid by Nepal in over 10 years because the AIIB’s charter says: “A member considered as a less developed country may pay its subscription entirely in dollars or other convertible currency in up to 10 instalments.”