The Asian Infrastructure Investment Bank is ready to invest in Nepal if the country brings a concrete proposal, according to the president of the bank
During the meeting with finance minister Bishnu Poudel in Beijing on Sunday, Jin Liqun, who was elected as the bank’s president for a five year term on Saturday has asked Nepal to bring proposal of infrastructure project. Poudel has asked the AIIB to invest in electric rail, hydropower, transmission lines and Special Economic Zones (SEZ).
According to Poudel, the president of the bank has asked Nepal to forward a proposal within this year for the investment.
China — the largest AIIB shareholder with about a 30 percent stake — is not planning to use the bank’s fund for its domestic financing. The bank with the authorised capital of $100 billion is expected to offer its first batch of project loans later this year. It is also expected to offer a loan around $10-15 billion annually.
Since Nepal needs huge financial support for the reconstruction in the aftermath of the devastating earthquakes on April 25 and May 12, the new bank could be an additional source of financing.
Likewise, Nepal needs to invest 8.24 percent to 11.75 percent of its gross domestic product (GDP) in infrastructure to bridge the investment gap in the sector, according to the World Bank. But Nepal’s investment in infrastructure accounts to 5 percent of the GDP only, which is almost half the need.
After the earthquakes, the need for the financing has also doubled.
Nepal as one of the 22 countries signing the memorandum of understanding on establishing the bank a year ago, is elected a board member on Saturday.