German cabinet adopts legislation to join Asian Infrastructure Investment Bank

By   /  November 30, 2016  /  Comments Off on German cabinet adopts legislation to join Asian Infrastructure Investment Bank

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MIL OSI – Source: German Ministry of Finance – in English –

Headline: German cabinet adopts legislation to join Asian Infrastructure Investment Bank

The German government has adopted draft legislation that will enable Germany to join the Asian Infrastructure Investment Bank (AIIB). The AIIB will have 57 founding members, including 14 EU member states and three additional European countries. Other non-Asian founding members include Brazil, Egypt and South Africa.

The bank’s objective is to promote sustainable economic development by financing infrastructure projects and other productive sectors in Asia. Its work is to be carried out in close cooperation with existing bilateral and multilateral development banks and financial institutions. A particular priority will be placed on promoting development-oriented public and private investment in infrastructure, especially in less-developed Asian countries.

In the German government’s view, participating in the AIIB builds on Germany’s successful involvement in international development banks and financial institutions for the purpose of supporting infrastructure projects.

Germany will contribute $4.5bn to the bank’s total capital of $100bn, making it the fourth-largest shareholder behind China, India and Russia.

The AIIB plans to begin operations in January 2016. The German government aims to complete its ratification process as early as mid-December 2015. This would make Germany one of the first countries to be a full member of the bank when its articles of agreement enter into force.

The AIIB has pledged to uphold high environmental, social and governance standards and to apply fair and up-to-date procurement rules. To this end, operative rules – especially in the areas of environmental, social and procurement standards – are currently being developed and are expected to be finalised by the end of 2015.

The chief negotiators are expected to meet two more times before then, with the next meeting taking place in Frankfurt am Main in late September. The Frankfurt meeting will focus on key rules governing business operations, such as the bank’s financial management and staff hiring rules. By hosting this meeting, Germany is highlighting its commitment to the success of the AIIB and is also giving the financial hub of Frankfurt an opportunity to demonstrate its strengths.

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Asian Infrastructure Investment Bank

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