A team of experts will be in place in Cairo in early 1996 to oversee the setting up of the Middle East Development Bank (MEDB), senior US administration officials say. The transition team, which is distinct from the task force that has discussed plans for the development bank during 1995, will be responsible for the technical work that will get the bank up and running by the end of 1997 (MEED 11:11:95).
The articles of association for the development bank were agreed by the founding shareholders of the institution during a 21 November meeting in the Egyptian capital, and commitments were made for about 75 per cent of the bank’s capital.
The bank will have authorised capital of $5,000 million, and paid-up capital of $1,250 million. The US, which has been the driving force behind the project, will become the largest shareholder with a stake worth about $750 million. Other shareholders are Japan, Russia and some European countries, including Italy, the Netherlands and Greece. In the region, the four core shareholders are Egypt, Jordan, Israel and the Palestinians, which will each have stakes worth no more than $150 million. Other countries in the region which have already signed up include Turkey, Morocco and Tunisia. However, final approval awaits the completion of respective legislative procedures.
The remaining 25 per cent of capital is expected to come from countries which have yet to be won over to the idea of a regional development bank. In the past, the US has said it is confident that states which have previously opposed the plans may be willing to join once the bank has been established. Among those against the formation of the bank are a majority of European states and countries in the Gulf.
The meeting of the bank task force in November also agreed to postpone until January discussion of the European Projects Preparation Facility (EPPF). Yet to be discussed is the relationship between EPPF and the bank’s own policy forum which would be performing a similar job of identifying project opportunities (MEED 24:11:95).