Turkey joins Asian Infrastructure Investment Bank with $2.6B capital
by Hazal Ateş
ANKARAJan 13, 2016 - 12:00 am GMT+3
by Hazal Ateş
Jan 13, 2016 12:00 am
President Recep Tayyip Erdoğan approved the establishment agreement over the Asian Infrastructure Investment Bank, in which Turkey is a founding member. According to the agreement, Turkey will not pay more than $2.6 billion - including capital subscription and other related payments - for the bank, which will have the potential to compete with the World Bank by providing support for energy, transportation and infrastructure projects. Turkey is the 11th largest stakeholder among all members and the seventh largest among competing countries in the region. Moreover, the Council of Ministers is entitled to increase the projected figure up to five times. The legislation on the ratification of the bank founding process was published in the official gazette.
The bank, which was established under the leadership of China, is expected to have $100 billion in capital. It has 57 founding member countries including China, Turkey, France, Germany, Italy, Jordan, Kuwait, Malaysia, the United Arab Emirates (UAE), the U.K., Spain, Australia, Russia and Egypt. However, Taiwan and North Korea's membership applications were rejected. Twenty of the 57 member countries are located outside of Asia. China is the largest shareholder in the bank with 26.6 percent, followed by India and Russia with 7.5 percent and 5.92 percent, respectively. Turkey's current registered capital of $2.6 billion gives the country a 2.5 percent share.
The bank will give priority to public projects in the first three years and will mainly finance infrastructure projects in the initial phase. Turkey, which holds its position as a regional member, will make the best of the bank's financing means. Furthermore, Turkish companies are expected to play an active role in many regional projects.