Muhith to join AIIB's first meeting

The first board meeting of the China-led Asian Infrastructure Investment Bank is set to be held on January 16 in Beijing, where major policy decisions including the interest rate on its loans may be taken.

Bangladesh, one of the 57 founding members of the Beijing-based bank, is sending a three-member delegation led by Finance Minister AMA Muhith to the two-day meeting.

Earlier in November, Jin Liqun, AIIB president-designate, told The Daily Star that the bank will not provide any concessional lending.

The lending charges for non-concessional loans will be more or less in line with the charges levied by the WB's the International Bank for Reconstruction and Development (IBRD) or the ADB's Ordinary Capital Resource (OCR).

The IBRD carries interest rates of LIBOR plus 1.35 percent and the OCR about 4.5 percent.

“Even though we do not give you the so-called concessional funding, the terms and conditions are far more favourable than you can possibly get from the market,” Liqun said.

The maturity period for the loans will be up to 30 years and the cost is much lower.

About the AIIB's focus on infrastructure, Liqun said the bank believes infrastructure investment is important for sustainable development, which, in turn, reduces poverty.

At the time, an AIIB team accompanied Liqun to Bangladesh and they held meetings with the officials of different ministries.

The AIIB chief said the bank is exploring opportunities to fund projects in Bangladesh, encouraged by the country's keenness to be among the first borrowers of the newly established institution. 

The team identified two projects of $450 million for which they may sanction loans.

The finance ministry official said one of the projects is under the railways ministry and another in the power division. Once the policies are set, those may be discussed at the next board meeting.

China's President Xi Jinping and Premier Li Keqiang will attend the opening ceremony of the meeting.

AIIB's authorised capital is $100 billion and subscribed capital of $50 billion.

Inaugurated on December 25 last year, the bank plans to invest in sectors including energy, transportation, urban construction and logistics as well as education and healthcare.