Mongolia to be a founding member of AIIB

Xi Jinping, President of People’s Republic of China proposed that some Asian countries, including Mongolia, Pakistan and Sri Lanka join the Asian Infrastructure Investment Bank (AIIB) as Prospective Founding Members during APEC CEO Summit held in October 2013. In this respect, preparation work to be carried out by Mongolia regarding the establishment of the AIIB began after Ambassador of Mongolia to China Ts.Sukhbaatar signed a Memorandum of Understanding on the founding of AIIB on October 24, 2014.

On June 29, 201, the AIIB Articles of Agreement were concluded and signed in Beijing by officials of 50 members of the named 57 Prospective Founding Members, including Mongolia. The other seven nations signed later. The Parliament of Mongolia ratified the document on October 8, 2015.

As a regional member of the AIIB, Mongolia will initially subscribe to 411 share or USD 41.14 million from the total authorized capital stock. The amount capital stock held by Mongolia is relatively low compared to other member nations in the region. The authorized capital stock of the AIIB is set to be USD 100 billion and the members will pay an aggregate par value of USD 20 billion in total, which is 20 percent of the total amount as their payment of subscriptions. Therefore, Mongolia will pay USD 8.22 million in five installments within five years, which would be USD 1.6 million each year. In respect to the number of shares of capital stock, Mongolia will be represented with 0.3013 of the total voting power in the AIIB.

N.Ganzorig, Counselor of Financial Regulatory Policy Department of Ministry of Finance of Mongolia underlined that Mongolia will gain several advantages by being a member of the AIIB, such as implementing AIIB projects in the first place and focusing on infrastructure projects that necessitate larger investment as well as receiving soft loans with a lower interest rate and so forth.

Currently, Mongolia is undertaking research and studies on possible projects to implement within the AIIB. On January 16, officials from the Finance Ministry of Mongolia participated the opening ceremony of the bank in Beijing, China.

Source: Mongol Messenger