The signing of the founding Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB) in Beijing on Monday marks an important step for the United Kingdom to build deeper relationship with Asia, a UK senior official said.
"The rapidly expanding Asian market presents a massive opportunity for the UK economy and it is in all our interests to strengthen our ties with the region," said Lord O'Neill, the UK's Commercial Secretary at the Treasury, representing the UK at the signing.
"Britain is a global leader in infrastructure investment and has some of the world's best expertise in this area making us well placed to capitalize on growing opportunities in Asia," he said.
The signing marked an important step in the process establishing the AIIB before it is expected to become fully operational by the end of the year.
Once fully established the AIIB will support access to finance for infrastructure projects across Asia, using a variety of measures - including loans, equity investments and guarantees - to boost investment across a range of sectors, initially including transport, energy and water.
"The formal signing marks an important next step in our plan to build a deeper partnership between the governments, companies and entrepreneurs of Britain and the fast growing economies of Asia...I believe our involvement at its birth will help unlock enormous opportunities for British companies and British jobs," George Osborne, the UK's Chancellor of the Exchequer (Finance Minister) said in a statement.
The UK was the first major Western country and first member of the G7 to apply to join the AIIB. Osborne first announced the UK's plans to become a founding member in March.
Through its early engagement in negotiations of the Articles of Agreement, the UK has ensured that the AIIB embodies the best standards in accountability, transparency and governance. This will be essential to ensuring the success of the bank and to unlocking the potential benefits for the wider global economy, UK's embassy in Beijing said in a statement.
As negotiations continue on detailed operational policies, environmental and social safeguards, ensuring international best practice will remain at the forefront of the UK's participation, it said.
The Articles of Agreement make sure that key decisions, including on operational and financial policies, can only be made by a super majority of signatory countries. This will ensure that no single country is able to force through decisions that do not have widespread support.
It is envisaged the bank will have initial capital of close to $100 billion (￡64 billion) to invest in infrastructure projects. It will be financed by individual country contributions proportionate to their economic size.
The UK will make a capital contribution of ￡2 b ($3.1b). Twenty percent will be paid-in capital, made in five equal annual installments of ￡80 m, with the first due in 2015-16; the remaining 80 percent will be in the form of callable capital.
