NEW DELHI: The New Development Bank (NDB) set up by BRICS (Brazil, Russia, India, China and South Africa) nations has lent about $13 billion for as many as 46 projects covering a diverse set of fields in the five BRICS countries. By the end of this year, the approvals are expected to reach about $15 billion, while in 2020 an additional $8-10 billion are targeted to be approved. The Bank’s regional office is likely to be operational in the first half of 2020.
The NDB was established by the BRICS nations to mobilise resources for infrastructure and sustainable development projects in the BRICS countries and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.
In India, the NDB is investing in improving connectivity of rural areas to markets and opportunities, as well as in better management of water resources. Prime Minister Narendra Modi, during the BRICS summit in Brasilia (Brazil), urged that the work of establishing the regional office of the NDB should be completed soon, which, he said, will give a boost to projects in India’s priority areas.
Before leaving for the summit, Secretary (Economic Relations) T.S. Tirumurti said, by all accounts, the NDB has gone off extremely well. “In fact, Prime Minister Narendra Modi had also proposed that they should be looking at clean and renewable energy, which is an area of great interest. They are probably looking at options on whether they would like to expand the membership of the bank,” he said.
So far, the NDB has received $5.6 billion in capital, including advance payments of the fifth instalment by China and Russia. The bank expects to receive the balance $900 million of the fifth instalment from the other three members by January 2020.
The bank’s Africa Regional Centre in Johannesburg has proved that on-the-ground presence makes a big difference. “The NDB’s Brazil office is already staffed and ready to open and we await completion of the necessary formalities. Preparations for our office in Moscow are at an advanced stage and we will open this office early next year. We will follow that up with our Delhi office in the first half of 2020,” said NDB president K.V. Kamath, while presenting his report during the summit in Brasilia.
“Going forward, the Bank is capable of sustaining between $8-10 billion of annual lending. With the initial $10 billion of capital that has been provided to it by the founding members, by 2027, the Bank can achieve a total asset book of about $50 billion,” he said, adding: “as and when the decision is taken to admit new members to the Bank, and capital from these new members is received, the Bank can grow further.” Under this scenario, it can achieve a total asset book of about $90 billion by 2027, he said.