The New Development Bank (NDB) is a multilateral development bank established by the BRICS countries (Brazil, Russia, India, China, and South Africa) in 2014. The bank aims to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging market economies. The NDB is headquartered in Shanghai, China, and has two regional offices in Johannesburg, South Africa, and São Paulo, Brazil.
The idea for setting up the bank was proposed by India at the 4th BRICS summit in 2012 held in Delhi. The creation of a new development bank was the main theme of the meeting. BRICS leaders agreed to set up a Development bank at the 5th BRICS summit held in Durban, South Africa, on 27 March 2013. On 15 July 2014, the first day of the 6th BRICS summit held in Fortaleza, Brazil, the BRICS states signed the Agreement on the New Development Bank, which makes provisions for the legal basis of the bank. In a separate agreement, a reserve currency pool worth $100 billion was set up by BRICS nations. On 11 May 2015, K. V. Kamath was appointed as the President of the bank. The 7th BRICS summit in July 2015 marked the entry into force of the Agreement on the New Development Bank.
The NDB finances projects and innovates tailored solutions to help build a more inclusive, resilient, and sustainable future for the planet. The bank focuses on the following areas:
- Clean energy and energy efficiency
- Transport infrastructure
- Water and sanitation
- Environmental protection
- Social infrastructure
- Digital infrastructure
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 NDB finances projects in BRICS and other emerging market economies. The bank has approved 96 projects with a total amount of financing approved of $32.8 billion. The projects include:
- 17,000 km roads to be built or upgraded
- 820 bridges to be built or upgraded
- 35,000 housing units to be constructed
- 1,390 km water tunnel/canal infrastructure to be built or upgraded
- CO₂ emissions to be avoided 13.2 million tonnes/year
- Renewable and clean energy generation capacity to be installed 2,800 MW
- 209,000 m³/day drinking water supply capacity to be increased
- 635,000 m³/day sewage treatment capacity to be increased
- 290 km urban rail transit network to be built
The New Development Bank is a significant step towards the development of emerging market economies. The bank’s focus on sustainable development projects and infrastructure financing is commendable. The NDB has the potential to become a major player in the global financial system and provide an alternative to the World Bank and other similar agencies. The bank’s success will depend on how far it will be able to act in unison and how it will be able to cooperate with international organizations and other financial entities.
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(3) New Development Bank – Wikipedia. https://en.wikipedia.org/wiki/New_Development_Bank.
(4) New Development Bank – Wikipedia bahasa Indonesia, ensiklopedia bebas. https://id.wikipedia.org/wiki/New_Development_Bank.
(5) Brics: Building a new development bank – BBC News. https://www.bbc.co.uk/news/business-28255127.
(6) Brics countries launch new development bank in Shanghai – BBC. https://www.bbc.com/news/33605230.
(7) NDB.N0000 | National Development Bank PLC Stock Price & News – WSJ. https://www.wsj.com/market-data/quotes/LK/XCOL/NDBN0000/historical-prices.