Minister Gordhan attends BRICS bank’s first annual meetings

bricsBy– SAnews.gov.za

Pretoria – Finance Minister Pravin Gordhan and a South African government delegation this week attended the first annual meetings of the New Development Bank (NDB) in Shanghai, China.

The meetings were held on Wednesday and Thursday.

“The BRICS [Brazil, Russia, India, China and South Africa] led institution utilised this event to take stock of its first year of operations, celebrating its achievements, whilst charting a course for the future,” said National Treasury on Thursday.

At the meetings, the South African delegation was party to discussions on the bank’s five-year strategy, the role and scope of the Africa Regional Centre, as well as preliminary discussions on the expansion of the NDB’s membership.

The bank’s Board of Governors, where South Africa is represented by Minister Gordhan, considered member countries’ development aspirations against the backdrop of an increasingly challenging global economic context.

The bank was established in 2014 and became operational in July 2015. The bank, which lends money to developing countries to help finance infrastructure projects, is seen as an alternative to the World Bank and the International Monetary Fund.

Its creation was first mooted at the Fourth BRICS Summit in New Delhi, with the subsequent eThekwini Summit in 2013 marking the start of official negotiations.

The NDB has moved at an unprecedented rate in pursuit of its mandate to “mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development”.

In its first year since its establishment, the bank has appointed an executive management team led by, internationally renowned banker, K.V. Kamath. The bank has also finalised its core operational policies and processed its first set of loans which includes a US$180 million facility for Eskom.

The NDB has also issued a renminbi denominated green bond (mobilising approximately US$448 million in the process).

The NDB aims to challenge existing multilateral development bank convention in support of policies. The NDB wishes to distinguish itself as a bank for and by developing countries through the swift approval of loans and the provision of development support in domestic currency among others.

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

In March, the bank announced that it had commenced its recruitment drive from member states.

Minister Gordhan and his delegation will remain in China to attend the G20 Meetings in Chengdu.

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