LeslieMaasdorp,VicePresidentandChiefFinancialOfficeroftheNewDevelopmentBankVCGBeijingReview:WhatistheroleoftheNDBintheBRICSgroup?
LeslieMaasdorp:TheNDBwasestablishedtofinancelong-terminfrastructure,especiallysustainableinfrastructure,inBrazil,Russia,India,ChinaandSouthAfrica.Thereisahugeneedtofinancethebuildingofports,roadsandrailways,andpowerallkindsofbiginfrastructuresoastocontinuetheprocessofindustrializationandgrowthoftheseeconomies.AlloftheBRICSeconomiesareemergingmarketsandinneedofsomeneweconomicinfrastructure.Thereisahugefinancinggapinthebuildingofthisinfrastructure.
Thereareexistingfinancialinstitutionsthatalsofinanceinfrastructureconstruction.Wewerestartedbythesefivecountriestocomplementandbeanadditionalresourcetohelpthemwithinfrastructureroll-out.
WhatachievementshastheNDBmadetodate?
ThebankwasstartedinJuly2015.Sincethen,wehavecompletedloanstothetuneof$5.1billion.TheseloansareforprojectsinallofthesectorsthatI鈥檝ementioned:ports,airportsandrailways,withastrongfocusonrenewableenergyandsomefocusonwaterandurbaninfrastructure.Sothebankhas,inaveryshortperiodoftime,establisheditselfandhas120professionalsworkingfortheinstitution.Wehavecompletedabout16projectsinthefivecountries.
HowdoestheNDBcreateabalanceoffundingamongitsmembercountries?
Firstly,thebankisuniqueinthesensethatitisownedinequalshareholdingbythefiveBRICScountries;soeachcountryholds20percentoftheshares.Eachofthefivecountriesputin$2billionofequity,andwehavealsowhat鈥檚referredtoascallablecapitalof$40billion.Sothetotalsubscribedcapitalbaseofthebankis$50billion.Thebankisfocusedonamodelofequalparticipationbythefivemembers.Sothefivecountriesarealsorepresentedequallyintheformoftopmanagement.Eachcountryhasonerepresentative;therefore,nocountryhasvetopowerinthebankorcontrolsthebank.ItisrunequallybytheBRICScountries.
HowdoestheNDBworkinharmonywithotherinternationalfinancialinstitutions?
TheNDBwascreatedasavoiceofemergingmarkets.AllofthefiveBRICSmembersaredevelopingcountries;howeverwedefinitelyworkinacomplementaryfashionwithotherfinancialinstitutionsliketheWorldBank,theAsianDevelopmentBank(ADB)andtheAfricanDevelopmentBank.Thereasonforthisisthelargedemandforinfrastructurefunding.
Theamountofinfrastructurefundingneededtobuildallthenewroads,ports,airportsandpowerstationsrequiredisverylarge.Eachofthesebankscontributestothateffortandthereisstillamassivefundinggap.Sothereisnorealcompetitionamongthesebanks.Weareallownedbythegovernment,sowethereforehaveapublicpolicymandate.Weallfocusonfinancinginfrastructure.
Infact,weareworkingrightnowonprojectswherewecooperatedirectlywiththeWorldBankandtheADB,andwearefundingtheseprojectstogether.WhatisuniqueabouttheNDBisthatourfocusismuchmoreonthedemandandtheneedsofdevelopingcountriesandemergingmarkets.
WhatinnovativeapproachestodevelopmentwilltheNDBpursue?
First,asIhavealreadymentioned,theoverwhelmingmajorityofourprojectsarefocusingonsustainability.Sowhateverwedo,wearegoingtobuilditinsuchawaythatwearefocusingonthelong-termneedsofthefivecountriesandonhowtoreducecarbonemissionsintheseeconomies.Wewillcontributetocleanandgreenenergyinthesecountries.Sothat鈥檚thefirstdifferentiator.
Second,wewanttoleveloffnewtechnology,sincetherehavebeensignificanttechnologicaladvancesinthewayinfrastructureisbuilttoday.Thekindofworldwelivein20or30yearsfromnowisgoingtobeverydifferentfromtheworldweliveintoday.Sowearetryingtolookatallthewaysinwhichwecanusethebestthattechnologyhastooffer.
Thethirdaspectofimportanceininnovativeapproachesisthatinthepast,multilateralbanksmainlyadvancedloansinU.S.dollars;wewillalsolendtocountriesintheirlocalcurrencies,whichthenenablesthecountriestoavoidforeignexchangerisks.Thebankwillalsopursuelocalcurrencyfinancing,whichisaformofinnovationtoo.
Fourth,wewillalsolookatnewformsoffinancingwiththeprivatesector.Thebankwillnotonlylendtothegovernmentandstate-runenterprises,butwillalsolendtotheprivatesectortobringinmoreprivatesourcesofcapitaltofinancetheseprojects.
InwhatwaycantheNDBbeofhelptoAfrica鈥檚developmentasawhole?
First,thebankisfocusedonlendingmainlytotheBRICScountries;soinAfrica,SouthAfricaistheonlymembercountryfornow.However,wewillputspecificemphasisonprojectsthatadvanceandenhanceregionalconnectivityandintegration.InSouthAfrica,wewilllookatprojectsthatcanbenefittheregion.That鈥檚thefirstwaytheAfricancontinentwillbenefit.
Thesecondwayisthatthebankwillopenupitsmembershiptonewcountriestojoininthenextyearorso,andweanticipatethatotherAfricancountrieswilljointhebankandthenbeabletodirectlyapplyforloans.Thereasonwhycountrieswillbequiteinterestedisthecostofcapitalortheinterestratesforloanswillbeverycompetitive.Wewillbeabletogivebetterratescomparedtowhattheygetfromcommercialbanks.SowewillbeabletohelptheadvancementanddevelopmentofAfricabygrantingloansforinfrastructureconstructioninthesecountries.
CopyeditedbyFranciscoLittleandRebecaToledoCommentsto
PresidentoftheNewDevelopmentBank(NDB)KVKamath(left)andSouthAfricanMinisterofInternationalRelationsandCooperationMaiteNkoana-MashabanesigndocumentsontheopeningoftheNDBAfricaRegionalCenterinJohannesburg,SouthAfrica,onAugust17,2017VCG