New Development Bank
The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states (Brazil, Russia, India, China, and South Africa).[1] According to the Agreement on the NDB, "the Bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments." Moreover, the NDB "shall cooperate with international organizations and other financial entities, and provide technical assistance for projects to be supported by the Bank."[1]
Abbreviation
NDB, or NDB BRICS
July 2014 (Treaty signed)
July 2015 (Treaty in force)
Treaty
Shanghai, China
English
The initial authorized capital of the bank is $100 billion divided into 1 million shares having a par value of $100,000 each. The initial subscribed capital of the NDB is $50 billion divided into paid-in shares ($10 billion) and callable shares ($40 billion). The initial subscribed capital of the bank was equally distributed among the founding members (Brazil, Russia, India, China, South Africa). The Agreement on the NDB specifies that every member will have one vote and that no member would have any veto powers.[1]
The bank is headquartered in Shanghai, China.[2] The first regional office of the NDB is in Johannesburg, South Africa.[3] The second regional office was established in 2019 in São Paulo, Brazil, followed by GIFT City, India and Moscow, Russia.[4]
Activities[edit]
Projects[edit]
According to the Bank's General Strategy, sustainable infrastructure development is at the core of NDB's operational strategy in 2017–2021, and the Bank will dedicate about two-thirds of financing commitments in its first five years to this area.[33]
The New Development Bank is planning to give a priority to projects aimed at developing renewable energy sources. As it was stated by the bank, it wants to cooperate with other institutions in accelerating ‘green’ financing expansion and promoting environment protection.[40]
Relations with other institutions[edit]
Approach[edit]
The Articles of Agreement of the bank say that the NDB was established to complement the existing efforts of multilateral and regional financial institutions for global growth and development. Moreover, the NDB is authorized by its founders to cooperate within its mandate with other international organizations, as well as national entities (public or private), in particular with international financial institutions and national development banks.[1]
The NDB President K.V.Kamath stresses that the bank regards other international financial institutions, including IMF and World Bank as partners, not rivals.[51]
Asian Development Bank[edit]
In July 2016, the NDB signed with Asian Development Bank (ADB) a memorandum of understanding on strategic cooperation. The two institutions expressed willingness to work together through co-financing and knowledge exchanges in areas including sustainable development projects in renewable energy, energy efficiency, clean transportation, sustainable water management, and sewage treatment.[52]
Asian Infrastructure Investment Bank[edit]
According to a representative of the Bank's management, the NDB and AIIB are sister institutions in many respects. These two banks have complementary mandates and different geographic focuses, with the NDB being more focused on BRICS countries. At the same time, there is a certain overlapping between mandates of the NDB and the AIIB, as both of them are aimed at developing infrastructure and pay a special attention to sustainable development. However, due to the fact that current financing and investment patterns are inadequate in meeting investment needs, there is "space for newcomers", he said.[53]
In February 2016, the president of the NDB dismissed concerns over overlapping of interests of China-backed AIIB and the NDB.[54]
World Bank[edit]
According to media reports, other multilateral development institutions, including the World Bank Group (WBG), have expressed an intention to work together with the NDB.[55] In September 2016, NDB and World Bank Group signed a memorandum of understanding on cooperation and it was announced that the NDB and WBG's cooperative efforts will focus primarily on infrastructure.[56]