IssuingitsfirstgreenbondinChina,gettingaAAAratingfromChineselendingagenciesandsettingupitsfirstregionaloffice,theAfricaRegionalCenter(ARC)inJohannesburg.ThesearesomeofthemajorbreakthroughsachievedbytheNewDevelopmentBank(NDB),aBRICS-initiatedmultilateraldevelopmentbank,inthelastthreeyears.
ThisJulyseesboththethirdanniversaryoftheestablishmentoftheNDBandthehostingofthe10thBRICSSummitinJohannesburg,SouthAfrica.TheNDB鈥檚achievementsarepartofitsvisionofmobilizingresourcesforinfrastructureandsustainabledevelopmentinBRICSmembersandemergingeconomiesasawhole.
AccordingtoNDBVicePresidentLeslieMaasdorp,thebankhasapprovedloansof$5.1billionsinceitsinception,usedon16projects.
鈥淎lloftheseprojectsfocusedonimprovingsustainabilityandaddressedsomeofthecriticaldevelopmentneedsofourmembercountries,鈥漵aidK.V.Kamath,PresidentofNDBattheopeningceremonyofthebank鈥檚ThirdAnnualMeetingheldinShanghailateMay.
Amongtheprojectsunderway,oneisbasedinSouthAfrica.Itisa$180-millionrenewableenergytransmissionprojectcarriedoutbyEskom,thelargestelectricityproducerinAfrica.Thesovereignguaranteedprojectisexpectedtoreducecarbondioxideemissionby1.3milliontonsannually.
NDBhasgrandambitionsfor2018.Accordingtoits2018budgetsummary,thebankplanstoapproveupto20newprojectsestimatedat$4billionthroughamixtureofissuancesinU.S.dollarsandlocalcurrencies,andwillbeginitsprivatesectorlendingoperationswhilealsoconsideringasecondregionalofficeinBrazil.Inthefirsthalfof2018,theapprovedprojectsaggregatewasover$1.7billion.Maasdorpsaidthebankisplanningtoreach$15billionworthofloansby2021.
Whilebeingcommittedtoitsvision,theNDBisembracingmoremembersandadaptingtoemergingtechnologiestooptimizetheinvestmentforsustainability.
Smartinfrastructure
Infrastructureisstillamajorconstrainttoboosttheeconomyinmanyemerginganddevelopingcountries.Asthetechnologyadvances,鈥渢heinfrastructurethatweneedtobuildtoday,foruseoverthenextseveraldecades,isfundamentallydifferentfromwhatwebuiltinthepast,鈥滽amathnoted.
InChina,forexample,bike-sharingtechnologyisencouragingmorepeopletotakepublictransportationasitprovidesalast-kmsolution.Autonomousvehicletechnologiesarealsoevolvingandgovernmentsareencouragingtestsofsuchtechnology.鈥淭hiswillfundamentallychangethewayroads,bridgesandparkingsystemsaredesignedandbuilt,鈥漵aidKamath.Besides,smartgrids,greenbuildings,hyperloopsandundergroundroadwayshavethepotentialtoadvancerapidlyinconjunctionwiththeongoinginnovationsinnetworkconnectivityandbandwidth.
TheNDBisconsciousoftheseandotherongoingdevelopmentsandalignsitsinvestmentdecisionstothenewpatternoftransportation.鈥淭hebiggesteconomicopportunitytodayisthatwecaninvestinanewgenerationofsmartandsustainabletechnologiestomeetourinfrastructurerequirements,鈥漵aidKamath.
Scalingupfinances
TheNDBbroughtmuchgoodnewstoAfricathisyear.AtitsThirdAnnualMeeting,SouthAfricanFinanceMinisterNhlanhlaNenewaselectedasthechairmanoftheboardofgovernorsofNDB.ItwasalsodecidedthatthenextannualmeetingwillbeheldinSouthAfricain2019.ThescaleandscopeoftheARCwillbefurtherincreased.
ThesedecisionsindicatefurtherfinancialsupportgiventotheAfricancontinent,andcommitmenttoboostdevelopmentinAfricaundertheframeworkofBRICScooperation,saidHuangYupei,anexpertinChina-AfricaeconomiccooperationattheChina-AfricaInternationalBusinessSchoolofZhejiangNormalUniversity.鈥淭heNDBadoptsaneffectiveapproachtofacilitateregionalintegration,industrializationandinfrastructureconstructioninAfricabylendingtospecificprojects,鈥漵aidHuang.
Openedforbusinesslastyear,theARCisinitiallytaskedwithprojectidentificationandpreparationandservesastheNDB鈥檚interfaceforgovernments,entitiesfromtheprivatesector,financialinstitutionsandprojectpreparationagencies.
WiththeARC鈥檚activerole,theNDBsignedamemorandumofunderstandingongeneralcooperationwiththeDevelopmentBankofSouthernAfrica(DBSA),formalizingaframeworkofcooperationbetweentheNDBandAfricanregionalfinancialinstitutionsforthecommoninterestoffosteringsustainabledevelopment.ASouthAfricanstate-owneddevelopmentbank,theDBSA,worksacrossthecontinenttopromoteeconomicandsocialdevelopment,aswellasregionalintegrationthroughinfrastructureinvestmentanddevelopment.
鈥淪uchcooperationwillassistAfricatorealizeindependentandsustainabledevelopment,鈥漵aidHuang.TheARCistakinganinnovativeapproachtolendingmodels,includinglocalcurrencyfinancingandattractingtheprivatesectortocontributefunds.Itisnotabletomakeuptheentirefinancialgap,but鈥渨illboostinvestors鈥檆onfidenceoninfrastructureandsustainabledevelopmentprojects,whichrequiresheavyinvestmentandalongperiodtorewardandacceleratelendingtosectorssuchasenergy,transportation,watersupplyandirrigationsystem,鈥漵aidHuang.
Inmanycases,whileitappearsthatinfrastructureconstructionprojectsareinshortoffunds,thechallengeisactuallyalackofmarketandcreditrulesandsystemstobringinfundsandfostersustainablegrowth,accordingtoinsiders.DevelopmentmultilateralinstitutionsliketheNDBcanhelpboostinvestors鈥檆onfidencebyeffectivelycombininggovernmentcreditandmarket-orientedoperationsandstimulatinginvestmentinlong-termprojects.Auniquewayinwhichitdiffersfromotherdevelopmentbanks,theNDBoffersloansinlocalcurrencies.鈥淭hismeansthattherecipientcountriescouldbetteravoidtherisksoftheexchangeratefluctuations,andfocusonlong-termsustainableprojects,鈥滺uangexplained.
LoansbytheNDBarenotrestrictedtoBRICSmembercountriesasithasbeenanopenmultilateralfinancingplatformfromtheinception.ThebankisnowmakingpreparationsintermsofacceptanceproceduresandtechnicaldetailstoabsorbnonBRICScountriesandenlargethecircleoffriends.鈥淲ithincreasedglobalinfluenceandmorefundsraisedandcontributed,theNDBwillincludemoreAfricancountriesinitsfinancialsupportscheme.TheupcomingBRICSSummitisexpectedtomaterializemoretangiblebenefitsinthisregard,andsetoutroutestoupgradefinancialcooperation,鈥漵aidHuang.
ZHANGCHUNHAILouJiwei(center),thenMinisterofFinanceofChina,YangXiong(right),thenMayorofShanghaiandK.V.Kamath,PresidentofNDBwitnessthelaunchofthebankinShanghaionJuly21,2015**Commentsto