New Development Bank: A Comprehensive Guide to Its Purpose and Function

The New Development Bank is a multilateral development bank established to finance infrastructure and sustainable development projects in emerging markets and developing countries. It was founded by the BRICS countries: Brazil, Russia, India, China, and South Africa.

The bank's primary goal is to provide financing for projects that promote economic growth and sustainable development, with a focus on infrastructure, energy, transportation, and social development.

The bank has a capital base of $50 billion, with an initial subscription of $10 billion from each of the founding member countries. This capital will be used to finance projects that align with the bank's goals and priorities.

The New Development Bank, or NDB, was established in July 2015 by the BRICS states - Brazil, Russia, India, China, and South Africa. It was previously known as the BRICS Development Bank.

The NDB has built an impressive record of milestones, with each one laying the groundwork for careful institutional building. This is a testament to the Bank's commitment to growth and evolution.

The NDB has been in operation for nearly a decade, with its founding dating back more than two decades since Jim O’Neill coined the term ‘BRICs’. This long-term vision has allowed the Bank to establish a strong foundation.

A special issue of the journal Global Policy explores the evolution and growth of the NDB in its first decade. This collection of articles provides valuable insights into the Bank's development.

The NDB was established to play a significant role in the global financial architecture, and its governance structure is unique compared to other multilateral development banks.

The New Development Bank has a unique structure that sets it apart from other international financial institutions. It has a strong presence in the BRICS countries, with its headquarters located in Shanghai, China.

The bank's governance structure is designed to promote cooperation and decision-making among its member countries. The Board of Governors, comprising the finance ministers of the five BRICS countries, plays a crucial role in setting the bank's overall direction and policies.

Each member country has a significant say in the bank's operations, with a weighted voting system that reflects their economic contributions. This ensures that the bank's decisions are made with a global perspective, rather than just being driven by the interests of a single country.

The New Development Bank (NDB) has a clear structure for its corporate governance. The main organs of the bank are the Board of Governors, Board of Directors, President, and Vice-Presidents.

The Board of Governors is an important part of the NDB's governance structure. The NDB's official website provides information about the composition of the Board of Governors.

The President of the NDB is elected on a rotational basis from one of the founding members. This ensures that the leadership of the bank is shared among its founding members.

K. V. Kamath from India was the first elected President of the NDB. He was replaced by Marcos Prado Troyjo from Brazil in 2020.

The NDB has a total of four Vice-Presidents, with each of the other four founding members contributing one Vice-President.

The New Development Bank's shareholding structure is a key aspect of its governance. The bank has an initial authorized capital of 1 million shares, with a par value of $100,000. Each founding member has subscribed 100,000 shares, totaling $10 billion.

Brazil, Russia, India, China, and South Africa have each subscribed 100,000 shares, giving them a significant stake in the bank. They all have exercisable votes and subscribed capital of $10 billion, making up 18.45% of the total subscribed capital.

The bank's other founding members, such as Bangladesh and Algeria, have also subscribed shares, but in smaller numbers. Bangladesh has subscribed 9,420 shares, while Algeria has subscribed 15,000 shares.

The shareholding structure of the New Development Bank is divided among its member countries, with each country having a specific number of shares. Here's a breakdown of the shareholding distribution:

The bank has also allocated shares to other member countries, including Egypt and Uruguay. Egypt has subscribed 11,960 shares, while Uruguay's subscription is unknown.

China's role in the creation of the NDB is seen as a "symbolic gesture" by Suisheng Zhao, aiming to reshape the Western-dominated international financial architecture.

The New Development Bank has had three presidents since its inception. K. V. Kamath was the first president, serving from May 11, 2015 to May 27, 2020.

Here is a list of the bank's presidents:

The New Development Bank has a total capital of $50 billion, which is a significant amount that will help the bank achieve its goals.

This capital is divided among the five founding members, with the BRICS countries (Brazil, Russia, India, China, and South Africa) contributing equally.

The New Development Bank has an initial subscribed capital of US$50 billion.

This capital is equally distributed among the founding members, making each member's share significant.

The payment of the amount initially subscribed by each founding member to the paid-in capital stock of the bank will be made in dollars in 7 installments.

Each member cannot increase its share of capital without all other four members agreeing, ensuring a collaborative approach to growth.

The bank will allow new members to join, but the BRICS capital share cannot fall below 55%.

The New Development Bank (NDB) has been actively issuing bonds to raise funding domestically on the Chinese market. In March 2016, the bank announced plans to issue a bond in China, with the exact size yet to be finalized.

The NDB successfully issued its first green financial bond in China on July 18, 2016, with an issue size of RMB 3 billion and a tenor of 5 years. This made it the first international financial institution to do so in the China onshore bond market.

The bond's nominal interest rate was 3.07%, and the proceeds will be used for infrastructure and sustainable development projects in the member countries. This move marked a significant milestone for the NDB in its efforts to support green financing.

In February 2019, the NDB placed a CNY 3 billion RMB-denominated bond in the China Interbank Bond Market, priced at the lower end of the announced range. This demonstrated the bank's ability to navigate the Chinese bond market effectively.

The NDB made history on May 18, 2022, by issuing a 7 billion RMB - 3 year bond into the Chinese Interbank Bond Market, becoming the largest bond ever made by a foreign issuer. It received an Issuer Rating of AA+ from both S&P and Fitch.

The New Development Bank (NDB) has set clear objectives to guide its operations. The bank aims to contribute to the development plans of its member countries through socially, environmentally, and economically sustainable projects.

Its main objectives include promoting infrastructure and sustainable development projects with significant development impact in member countries. The NDB also aims to establish a network of global partnerships with other multilateral development institutions and national development banks.

To achieve these objectives, the NDB has a balanced project portfolio that takes into account the geographic location and financing requirements of its projects. This ensures that the bank's resources are allocated effectively to support development in its member countries.

The New Development Bank (NDB) has some clear objectives that guide its work. The bank aims to contribute to national development plans with socially, environmentally, and economically sustainable projects.

One of the main objectives is to promote infrastructure and sustainable development projects with a significant development impact in member countries. This involves creating projects that benefit the environment, society, and the economy.

The NDB also wants to establish a strong network of global partnerships with other multilateral development institutions and national development banks. This will help the bank access more resources and expertise to support its projects.

To achieve this, the NDB will build a balanced project portfolio, taking into account factors such as geographic location and financing requirements. This will ensure that the bank's resources are used effectively and efficiently.

Here are the NDB's main objectives summarized:

The NDB is not alone in its mission, as it has a sister institution in the Asian Infrastructure Investment Bank (AIIB).

The BRICS New Development Bank (NDB) is a vital partnership for promoting economic growth and development in emerging markets. The bank's membership has been growing steadily since its inception in 2015.

The original five founding members of the bank are Brazil, Russia, India, China, and South Africa. These countries have a significant share of the total voting power, with more than 90% currently.

The NDB's membership is not limited to these five countries, however. According to the bank's Articles of Agreement, all members of the United Nations can become members of the NDB. This expansion will help boost the bank's business growth and increase its global impact.

Some of the countries that have recently joined the NDB include Bangladesh, the United Arab Emirates, Uruguay, Egypt, and Algeria. These countries have been admitted as new members in recent years, bringing their expertise and resources to the bank.

Here's a list of the original BRICS countries and some of the new members of the NDB:

The New Development Bank (NDB) is all about building strong relationships with other institutions to achieve its goals.

The NDB aims to establish an extensive network of global partnerships with other multilateral development institutions and national development banks. This is crucial for the bank's success, as it will help to promote infrastructure and sustainable development projects.

The NDB President, K.V.Kamath, views other international financial institutions, such as the IMF and World Bank, as partners, not rivals. This collaborative approach is essential for achieving the bank's objectives.

In July 2016, the NDB signed a memorandum of understanding with the Asian Development Bank (ADB) on strategic cooperation. This agreement will enable the two institutions to work together through co-financing and knowledge exchanges.

The NDB is also open to partnerships with other countries, including Colombia, Honduras, and Zimbabwe, which are potential or prospective members.

The New Development Bank has made a significant commitment to sustainable infrastructure development, dedicating about two-thirds of its financing commitments to this area in its first five years.

The bank is prioritizing projects that develop renewable energy sources and promote environmental protection, with a goal of accelerating 'green' financing expansion.

One of the key strategies of the bank is to finance projects that conform to high environmental standards, including those in the field of infrastructure such as energy, railways, and highways.

As of 6 March 2019, the NDB Board of Directors approved 30 projects with loans aggregating over approx. USD 8 billion.

The bank has begun non-sovereign operations with loans approved in Brazil, South Africa, and Russia, and is responding quickly to the needs of its member countries.

The World Bank has a memorandum of understanding with the New Development Bank (NDB) to work together on infrastructure projects.

This cooperation is a significant step forward in global development efforts, and it's interesting to note that the World Bank Group has expressed a willingness to collaborate with other multilateral development institutions.

The World Bank Group's focus on infrastructure aligns with the NDB's goals, and it's likely that their cooperative efforts will yield positive results in this area.

The New Development Bank has prioritized sustainable infrastructure development, dedicating two-thirds of its financing commitments to this area in its first five years.

The bank is focusing on projects that develop renewable energy sources, aiming to cooperate with other institutions to expand "green" financing and promote environment protection.

High environmental standards are essential for the NDB, including those in infrastructure projects like energy, railways, and highways.

Financing profitable projects with a return on capital is also a key strategy, as stated by the NDB President, K. V. Kamath.

The bank wants to fund projects that are creative and bring benefits to local people and the environment, as emphasized by Vice President Zhu Xian.

As of March 2019, the NDB Board of Directors approved 30 projects with loans totaling over USD 8 billion.

Non-sovereign operations have begun, with loans approved in Brazil, South Africa, and Russia.

In May 2024, the bank will allocate USD 1.115 billion to Rio Grande do Sul for rebuilding urban and rural infrastructure after the 2024 floods.

The New Development Bank's identity and branding are crucial aspects of its operations.

The bank's primary objective is to mobilize resources for infrastructure and sustainable development projects in BRICS countries, as stated in its Articles of Agreement.

Its headquarters is located in Shanghai, China, a deliberate choice to reflect the bank's commitment to regional development.

The bank's logo features the BRICS emblem, symbolizing the unity and cooperation among its member countries.

The bank's brand identity is designed to be simple, yet distinctive, reflecting its mission to promote inclusive and sustainable development.