Bangladesh will have to initially pay $132.1 million to become a member of the proposed Asian Infrastructure Investment Bank or AIIB.

Proposed by the Chinese government in 2013, the new bank will look to finance Asia's enormous infrastructure needs, which are well beyond the capacity of today's institutional arrangements to finance.

The AIIB will have 57 members, the representatives of whom will convene in China later this month to sign the agreement that would make the multilateral development bank official.

MA Mannan, state minister for finance and planning, will sign the deal on June 29 on behalf of Bangladesh.

Once the bank is functional, Bangladesh will apply for project loans and technical assistance, Mannan said yesterday, adding that the rate of interest would be competitive with those of the World Bank and the Asian Development Bank.

An official of the Economic Relations Division said the bank is likely to start off in next January and the terms and conditions of its loans would be similar to those of ADB.

At present, the ADB gives two types of loans: one which carries an interest rate of 2.5 percent and another linked to Libor, which is normally within the range of 4.5 to 5 percent.

The rate of interest on loans from the WB is 0.75 percent and is repayable in 40 years after a ten-year grace period. In other words, the receiving country gets 50 years to repay the loan.

Mannan said the new bank will provide loans for big infrastructure projects such as roads, railways and power.

When asked for what type of projects Bangladesh will seek loans first, he said: “The government will make the decision on this in due time.”

Earlier in October last year, during the signing of the preliminary agreement by 21 countries, Chinese Finance Minister Lou Jiwei said the prospective founding members agreed that the gross domestic product would be the basic parameter for determining the share allocation among the nations. Bangladesh's share will most likely be 0.6729 percent, said the ERD official.

The members' contribution to the requisite initial capital of $50 billion would be proportional to their GDP at market price and purchasing power parity.

The bank to be headquartered in Beijing will have authorised capital of $100 billion, of which Bangladesh will have to furnish $660.5 million, according to the ERD official. The amount will have to be paid in five equal instalments over five years from January 2016, he added.

Jin Liqun, former deputy finance minister of China, has been working as the bank's secretary general since October last year.