Brics bank holds first annual meeting, taking stock of year’s operations

THE New Development Bank (NDB) held its first annual meeting on Thursday, attended by Finance Minister Pravin Gordhan in Shanghai, China. There, it took stock of its first year of operations, according to the Treasury. The bank, which is a Brics-led initiative, was established in 2014 and became operational in July 2015. In May last year, Indian private banker KV Kamath was appointed to head the institution. The

Treasury said in the first year of operation, the bank had been able to finalise its core operation policies and appoint an executive management team led by Kamath. The bank had also processed its first set of loans. This included a $180m loan to Eskom. Bloomberg in April reported that the loan would be used to secure power lines that could transmit 670MW and transform 500MW of renewable energy generation.

The NDB has provided $811m in the first round of loans for clean-energy projects in four countries — Brazil, India, China and SA.

Earlier in July, the bank raised 3-billion yuan (about $450m) by issuing its first "green" bond.

The bank’s inaugural green bonds reportedly had a tenor of five years and paid 3.07% interest.

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The Treasury said the NDB had moved at "an unprecedented rate" in pursuit of its mandate.

The South African delegation, under Gordhan’s leadership, participated in the discussions on the bank’s five-year strategy, the role and scope of the African regional centre, and the preliminary discussions on the expansion of the NDB’s membership.

"The NDB aims to challenge existing multilateral development bank convention in support of policies. Accordingly, the NDB wishes to distinguish itself — as a bank for, and by, developing countries," the Treasury said.

It was hoping to do this by ensuring that there was swift approval of loans, along with effectiveness of country systems in the implementation projects and the provision of development support in domestic currency.

The bank also wanted as many local currency bonds as possible, along with obtaining a credit rating to reduce the cost of borrowing, share knowledge and expertise and reduce "bureaucratic hurdles" to financing.

"In the year to come, the bank will continue on its ambitious path, including the recruitment of staff, launch of the ARC, mobilisation of additional resources in the capital markets and expansion of its investment programme," the Treasury said.

Gordhan and his delegation would remain in China to attend the Group of 20 meetings in Chengdu.