SINGAPORE and 20 other countries signed a deal on Friday to set up the Asian Infrastructure Investment Bank (AIIB), a multilateral lending institution that focuses on infrastructure development in Asia.
Spearheaded by China, the AIIB has an authorised capital of US$100 billion (S$127.5 billion), with the initial subscribed capital expected to be around US$50 billion, said Xinhua news agency, citing the Memorandum of Understanding. The paid-in ratio will be 20 per cent, according to Xinhua.
The AIIB will be headquartered in Beijing and is intended to address Asia's burgeoning demand for transportation, dams, ports and other facilities.
Singapore's Deputy Prime Minister Tharman Shanmugaratnam, who was at the signing ceremony in Beijing, called the AIIB a "positive development to meet the immense infrastructure needs in Asia," said a statement from Singapore's Ministry of Finance (MOF).
"Singapore looks forward to partnering other members to establish the AIIB as a resilient multilateral institution, complementing and drawing on best practices of existing players like the World Bank and Asian Development Bank, so as to promote sustained growth in Asia," Mr Tharman said.
Details of how the new bank will work, such as the members' contributions to the funds, have yet to be worked out, said the MOF statement.
The other 20 countries who inked the deal are: Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Sri Lanka, Thailand, Uzbekistan, and Vietnam.
Widely seen as China's bid to provide an alternative to the United States and Japan-backed Asian Development Bank, the AIIB has not gained as much traction as Beijing has hoped.
Reports say that Washington lobbied its allies intensely this week to snub the new body, as ministers of 21 economies gather in Beijing for the Asia-Pacific Economic Cooperation (Apec) meetings.