Malaysia joined 20 proposed founding member countries to set up the Asian Infrastructure Investment Bank (AIIB),a government statement said here Friday.
Malaysia's Ministry of Finance (MoF) said in the statement that AIIB would focus more on financing physical infrastructure projects for economic growth as compared to other multilateral development bank (MDB) on eradicating poverty.
The 20 countries signed a non-binding multilateral MoU on Friday in Beijing, China to set up AIIB, which will be funding infrastructure development. Ahmad Husni Hanadzlah, second minister of finance signed on behalf of Malaysia, said the statement.
"As such, it is intended to complement and supplement the other existing MDBs such as the Asian Development Bank and the World Bank as well as other financial initiatives, for example the ASEAN Infrastructure Fund, by co-financing big scale infrastructure projects," the statement added.
The proposed initial authorized capital for AIIB is 50 billion U.S. dollars, of which 20 percent will be the paid-up capital. AIIB will use commercial funding from financial markets to raise the necessary resources to provide competitive loans to the member countries.
MoF said the resources will be allocated based on three key criteria; regional development impact, assisting the poor and no fixed system based on share allocation.
AIIB's objectives would be to speed up infrastructure development in energy and power, transportation, telecommunication, rural infrastructure and agricultural development, urban development, logistics and other productive sector as deemed appropriate.
"This will facilitate higher economic growth which will give significant impact to the well being of especially low income countries," said the statement.