AIIB Assessing Iranian Projects for Funding

The Asian Infrastructure Investment Bank is ready to finalize the assessment report on projects introduced by Iran to the China-based lender to receive funding, AIIB’s deputies announced.

During a meeting with Iranian Minister of Economic Affairs and Finance Ali Tayyebnia, the deputies presented the draft report of the assessment of Iranian projects prepared by AIIB’s departments to Tayyebnia.

Tayyebnia met with two deputies of AIIB on Monday and informed them that Iran has completed the process of full membership in the bank, Shada, the official news service of Economy Ministry, reported.

According to the AIIB report, the lender is making the final assessment of sewerage projects in three Iranian provinces, which will be presented to the bank’s board to get approval for the required credits.

The meeting was being held on the sidelines of the Second Annual Meeting of AIIB’s Board of Governors which took place in Jeju, South Korea, on June 16-18.

“In line with the government’s policies to expand relations with international organizations and as a founding member state, the Iranian Parliament ratified the country’s membership in AIIB and the [constitutional watchdog] Guardians Council has approved it, therefore the process of full AIIB membership is finalized,” Tayyebnia said.

“The assessment process of projects that Iran introduced are progressing well, as AIIB sends delegations to Iran and it is hoped that after previous follow-ups by Iran, the financing of aforementioned projects is approved by the bank’s board,” he added.

The Iranian Parliament has ratified the country’s membership in AIIB in August 2016 and authorized the Iranian government to purchase 15,808 shares of AIIB worth $580,800. It also permitted Iran’s participation in AIIB’s future capital increase.

Tayyebnia emphasized that developing relations with Asian countries and regional international institutions is of great importance for the Iranian government.

President Hassan Rouhani had sent the bill for Iran’s membership in Asian Infrastructure Investment Bank to the Majlis back in December 2015. The bill specifies that membership in AIIB is in accordance with the country’s declared foreign policy to foster relations with Asian states and help augment Asia’s resilience in times of international crises.

 Iranian Backing

The Iranian economy minister expressed his satisfaction over the sagacious management of the bank, which is not motivated by political considerations but based on technical and expert criteria.

Tayyebnia also said Iran is prepared to expand relations with AIIB in other fields such as receiving technical assistance or providing manpower for the bank.

An international financial institution, AIIB aims to support infrastructure development in the Asia-Pacific region. It was proposed by the government of China and consists of 57 member states, or “founding members”.

The bank is widely regarded as a strong and emerging rival to western lenders, namely the International Monetary Fund and the World Bank, both headquartered in Washington.

AIIB operates with a capital of $100 billion, equivalent to two-thirds of the capital of Asian Development Bank and about half of the World Bank.

Along with 26 other initial founding member states, Iran signed the bank’s constitution on June 29 in Beijing and currently holds 15,808 shares, or 1.61% of all the shares, granting the country a 1.63% voting rights.

Tayyebnia also announced Iran’s support for AIIB in approving new memberships in order for the bank to become the biggest international development bank.

 Last May, AIIB announced that it had approved the membership of seven new countries, namely Bahrain, Bolivia, Chile, Cyprus, Greece, Romania and Samoa, which brings the bank’s total members to 77 countries.

According to an internal list of “potential new members” circulated to delegates, the bank’s complexion is set to change with a surge in applicants from Africa and Latin America, Financial Times reported.  

That would allow AIIB, which can only fund projects in member countries, to rapidly expand its presence in both regions, as western governments wrestle with the consequences of the UK’s vote to withdraw from the EU.