Egypt signed Monday an agreement that provided the legal framework for the China-led multilateral Asian Infrastructure Investment Bank (AIIB). Initial capital for the bank is to reach $50bn, and the amount is expected to double in the future. The AIIB is expected to be established by the end of this year and aimed to provide loans for developing countries in Asia for infrastructure projects. It will be an international financial institution that supported economic development and improve infrastructure in Asia, support regional partnerships and establish tight cooperation with other financial institutions. Magdy Amer, Egyptian Ambassador to China signed Monday a special document in China cementing Egypt's place as one of 57 AIIB founding nations. The AIIB Founders' Agreement will govern the partnership between the founding countries. In mid-April, Egypt received the official approval to join the China-backed bank, whereby, before the final approval was confirmed, China had welcomed the country's request. By becoming a founding member, Egypt will gain noticeable benefits, particularly as the country's main needs are in infrastructure development, which will require billions of dollars in investments. Egypt will be able to attract preferential financial resources for implementing infrastructural projects. The delegates from 57 founding countries gathered at the Great Hall of the People for the signing ceremony. The 60-article agreement specified each member's share as well as governance structure and policy-making mechanism of the bank, which is designed to finance infrastructure in Asia. The bank seeks to "promote Asia's connectivity and also deepen regional cooperation for the sake of development," Chinese President Xi Jinping said The AIIB will have authorised capital of $100 billion, and Asian countries will contribute to up to 75 per cent of the total capital. Each member will be allocated a share of the quota based on their economic size, according to the agreement. The bank is designed to finance infrastructure construction in the continent. The AIIB, which will have billions of dollars to lend, is expected to go into operation later this year. Speaking at the signing ceremony, China's Finance Minister Lou Jiwei said the AIIB will uphold high standards and follow international rules in its operation, policy-making and management to ensure efficiency and transparency. After signing the agreement, representatives of prospective founding members will take the agreement back to their respective countries for legal adoption processes, the Chinese Finance Ministry said. The US and Japan, which oppose the AIIB, are the most prominent countries not to join. The establishment of the new financial institution is seen as a diplomatic win for China, the world's second largest economy. Kuwait was the first Arab country to join the AIIB, followed by Oman, Qatar, Saudi Arabia, Jordan, and Egypt.
