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New Development Bank Financing of BRICS Nations Steps Up
9 December 2023
EIRNS—The New Development Bank, founded by the BRICS nations in 2014-2015, and known also as the “BRICS bank,” boosted its lending to South Africa and Brazil in the first week of December. The New Development Bank (NDB) issued its second bond offering in South Africa’s currency, the rand (abbreviated as ZAR), on Dec. 5, continuing the process of strengthening the bank’s ability to loan in local currency. This bond issuance, at 1.3 billion rand, was only slightly smaller in amount than the first such bond sale on Aug. 15 of 1.5 billion rand. The sums in dollar-equivalent are small (approximately $68 million in this week’s sale), but both exceeded the NDB’s goal of 1 billion ZAR in bonds. “The NDB is committed to delivering on its mandate of providing the option of local currency funding for infrastructure and sustainable development projects in its member countries,” NDB Vice-President and Chief Financial Officer Leslie Maasdorp commented after the sale, and shows the Bank is “establish[ing] itself as a regular issuer in the local capital markets.” The following day, NDB President Dilma Rousseff was back in Brazil, joining President Lula da Silva at the signing ceremony for two loans totaling $1.7 billion for Brazil’s National Bank for Economic and Social Development (BNDES). BNDES has historically played a critical role in providing credit for the industrialization and development of Brazil’s physical economy, and President Lula da Silva is working to restore that historic role, after Wall Street and the City of London interests had reduced it, by and large, to a financial spigot for speculators plundering the nation’s producers, public and private. The new loans are billed as a package of “green loans.” The smaller, for $500 million, is definitely that, earmarked for BNDES’s Climate Program “to reduce greenhouse gas emissions and enable climate change adaptation actions.” Despite its green wrapping, the larger loan, for $1.2 billion, has a broader mission of financing infrastructure and assistance to states and municipalities. According to NDB, the projects to which BNDES will allocate this money include “urban mobility, water and sanitation, transportation, and social infrastructure (information and communication technologies)—with a focus on education and health,” as well as “renewable energy.” “The BRICS bank seeks to contribute to improving living conditions for the majority of the population in developing countries, while promoting the dissemination of successful experiences in sustainable development and cooperation based on the spirit of true multilateralism,” Rousseff said at the ceremony. “We are working hard to meet the needs of the member countries of the so-called BRICS Bank.” NDB activity has picked up under Rousseff’s leadership. While the NDB supported 94 direct investment projects in each member country amounting to approximately $33.8 billion since it became operational in 2015, the bank now “has a pipeline of 78 projects for 2023 and 2024 totaling another $18.9 billion,” the NDB reports. [ggs] |