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). 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."
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.
The bank is headquartered
in Shanghai, China. The first regional office of the NDB is in Johannesburg,
South Africa. The second regional office was established in 2019 in São Paulo,
Brazil, followed by GIFT City, India and Moscow, Russia.
It was founded with the
aim of mobilizing resources for infrastructure and sustainable development
projects in emerging economies and developing countries. Here are some key points about the NDB:
Establishment:
The NDB was established in 2014 during the 6th BRICS Summit held in Fortaleza,
Brazil. Its formation was driven by the desire to create an alternative source
of funding for development projects, reducing reliance on traditional
Western-dominated financial institutions.
Purpose: The primary purpose of the NDB is to finance infrastructure and sustainable development projects in BRICS countries and other emerging economies and developing countries. It aims to promote economic development, social progress, and environmental sustainability.
Membership:
The founding members of the NDB are Brazil, Russia, India, China, and South
Africa, the BRICS countries. However, the bank is open to membership by other
UN member states.
Governance:
The governance structure of the NDB consists of a Board of Governors, a Board
of Directors, and a President. Decision-making in the bank follows the
principle of equal participation among member countries, with each having an
equal say in the bank's operations and policies.
Operations:
The NDB provides loans and financial assistance for infrastructure and
sustainable development projects in various sectors such as energy,
transportation, water supply, and sanitation. It also offers technical
assistance and knowledge-sharing initiatives to support the implementation of
these projects.
Focus
on Sustainability: The NDB emphasizes the importance of
sustainability in its operations, promoting environmentally friendly and
socially inclusive development projects. It aims to support projects that
contribute to climate change mitigation, adaptation, and resilience.
