HIMALAYAN NEWS SERVICE
KATHMANDU: The capital of the Asian Infrastructure Investment Bank (AIIB), a multilateral bank which is being established in China’s initiative, may top as much as $100 billion, says a statement issued by the press secretary of Finance Minister Ram Sharan Mahat.
The information was extended during Minister Mahat’s meeting with Chinese Finance Minister Lou Jiwei in Beijing today. Earlier, China had proposed to establish the bank, which is most likely to be headquartered in Beijing, with a capital of $50 billion. The promoter shares of the bank are expected to be allotted in September, says the statement.
“The bank is being established to cater to growing demand for credit in Asia to finance various projects, which multilateral institutions like the World Bank (WB) and the Asian Development Bank (ADB) may not be able to fulfil,” the statement quoted Chinese Minister Lou as saying, adding, “The proposed bank will be different from the WB and the ADB, as it will extend loans easily without having to go through long administrative processes.”
Nepal has already agreed to become the founding member of the multilateral financial institution and is expected to sign a memorandum of understanding on it soon. Nepal is hoping that relatively cheaper loans extended by the bank will help it meet its development endeavours.
Nepal is one of around 10 countries in Asia that has so far expressed interest to become a member of the bank. Currently, a delegation led by Madhu Kumar Marasini, chief of the International Economic Cooperation Coordination Division at the Ministry of Finance, is in Beijing to attend the fourth consultative meeting of the proposed bank.
During the meeting with Minister Lou, Minister Mahat, who is on seven-day official visit to China, reminded his Chinese counterpart about delay in implementation of the 750MW West Seti hydropower project. He also urged Lou to intervene in the dispute between Nepali and Chinese financial institutions over payment of over one billion rupees.
The case involves China Railway 15 Bureau Group Corporation — the ousted contractor of Melamchi Water Supply Diversion Project — and two domestic banks — Himalayan Bank and Bank of Kathmandu, which were dragged to the court by China Railway and denied payment of over one billion rupees.
Also, Mahat requested Lou to open a bank here under Chinese investment or in joint venture with Nepali financial institution to facilitate trade, clearing and settlement of payments, says the statement.