New Development Bank facts for kids
 |
|
NDB headquarters in Shanghai, China
|
|
Membership of the New Development Bank
|
|
| Abbreviation | NDB, or NDB BRICS |
|---|---|
| Formation | July 2014 (Treaty signed) July 2015 (Treaty in force) |
| Type | International financial institution |
| Legal status | Treaty |
| Headquarters | Shanghai, China |
|
Membership
|
 Bangladesh Brazil China Egypt India Russia South Africa United Arab Emirates Uruguay |
|
Official language
|
English |
|
President
|
Dilma Rousseff |
|
Parent organization
|
BRICS |
The New Development Bank (NDB) is like a special bank created by a group of countries called BRICS. These countries are Brazil, Russia, India, China, and South Africa. The NDB used to be called the BRICS Development Bank.
This bank helps fund big projects in its member countries. It can give out loans, offer guarantees, or invest in projects. The NDB also works with other international groups and financial organizations. It can even offer expert advice for projects it supports.
The bank started with a lot of money, about $100 billion. This money is divided into shares. Each of the founding countries (Brazil, Russia, India, China, South Africa) put in an equal amount of money to start the bank. In the NDB, every member country gets one vote, and no single country has a special veto power.
The main office of the NDB is in Shanghai, China. It also has other offices around the world. You can find regional offices in Johannesburg, South Africa; São Paulo, Brazil; GIFT City, India; and Moscow, Russia.
Contents
How the Bank Started
The idea for creating this bank came from India in 2012. This was discussed at a big meeting of BRICS leaders in Delhi. The leaders agreed to set up the bank in 2013, at another meeting in Durban, South Africa.
On July 15, 2014, the BRICS countries officially signed an agreement to create the New Development Bank. This happened during their meeting in Fortaleza, Brazil. At the same time, they also set up a special fund of $100 billion to help each other in financial emergencies.
In May 2015, K. V. Kamath from India became the first President of the bank. The NDB officially started its work in July 2015.
In 2016, the NDB signed an agreement with China about its headquarters in Shanghai. The bank also approved its main rules and ways of working.
On July 19, 2016, the NDB made history by selling its first "green bond" in China. This bond raised 3 billion Chinese Yuan (RMB) to fund environmentally friendly projects. The first yearly meeting of the NDB's leaders was held in Shanghai on July 20, 2016. They talked about the bank's future and praised its early work.
Later in 2016, the NDB approved its first projects in all its founding member countries. On December 21, 2016, the NDB signed its very first loan agreement.
In August 2018, the NDB received high credit ratings (AA+) from S&P Global Ratings and Fitch Ratings. This means the bank is seen as very reliable, which helps it offer more financial products to its clients.
By March 2019, the bank announced plans to lend up to $40 billion to South Africa by 2022.
In April 2020, the NDB created an Emergency Assistance Facility. This fund aimed to help countries fight the Coronavirus and deal with its economic effects. The bank planned to provide up to $10 billion for this.
In March 2022, the NDB paused all new deals with Russia, following "sound banking principles." Even though the NDB acted quickly, Fitch Ratings still lowered the bank's credit outlook.
In May 2022, the NDB opened a new office in Gujarat, India. This office will help fund and oversee big building projects in India and Bangladesh.
In May 2023, Saudi Arabia shared that it wants to join the NDB.
How the Bank Works
Who Runs the Bank?
The NDB has three main groups that help it run:
- The Board of Governors
- The Board of Directors
- The President and Vice-Presidents
You can find more details about the Board of Governors on the bank's official website.
The NDB President is chosen from one of the founding countries, and they take turns. There are also four Vice-Presidents, one from each of the other four founding countries.
K. V. Kamath from India was the first President. Then, Marcos Prado Troyjo from Brazil took over in July 2020. After that, Dilma Rousseff from Brazil became the President on March 24, 2023.
Bank's Money
The New Development Bank started with $50 billion in subscribed capital and can have up to $100 billion in total. The first $50 billion was shared equally among the founding members. These countries pay their share over seven payments in US dollars. No member can increase their share of money without all other four founding members agreeing. The bank can let new countries join, but the BRICS countries must always own at least 55% of the bank's capital.
What the Bank Aims For
The NDB wants to help countries with their development plans. It focuses on projects that are good for society, the environment, and the economy. Here are its main goals:
- Help fund projects that build things like roads and power plants, and that also help countries develop in a good way.
- Work closely with other international banks and national development banks around the world.
- Choose a good mix of projects from different countries, considering their needs and how much money they require.
Who Are the Members?
.jpg)
The agreement to create the New Development Bank officially started in July 2015. The five founding members are Brazil, Russia, India, China, and South Africa.
The bank's rules say that any country that is a member of the United Nations can join the NDB. However, the BRICS nations must always have at least 55% of the voting power.
Many experts believe that having more member countries is important for the NDB's future. It can help the bank grow and do more business.
The NDB plans to add new members slowly. This way, it can make sure it can handle the new members without too much difficulty.
In September 2021, Bangladesh, the United Arab Emirates, and Uruguay joined the NDB. In December 2021, Egypt also became a new member.
Algeria has officially asked to join the NDB after its president visited China. Other countries that might join in the future include Honduras and Zimbabwe.
The New Development Bank started with 1 million shares, each worth $100,000. Each of the five founding members bought 100,000 shares, which means they each put in $10 billion.
Here is a table showing how the shares are currently divided among the NDB member countries:
| Country | SHARES (NUMBER) Shares subscribed |
SHARES (NUMBER) Exercisable votes |
SUBSCRIBED CAPITAL Amount (billion USD) |
SUBSCRIBED CAPITAL % of total |
|---|---|---|---|---|
| Brazil |
100,000 | 100,000 | 10.000 | 18.98% |
| Russia |
100,000 | 100,000 | 10.000 | 18.98% |
| India |
100,000 | 100,000 | 10.000 | 18.98% |
| China |
100,000 | 100,000 | 10.000 | 18.98% |
| South Africa |
100,000 | 100,000 | 10.000 | 18.98% |
| Bangladesh |
9,420 | 9,420 | 0.942 | 1.79% |
| Egypt |
11,960 | 11,960 | 1.196 | 2.27% |
| United Arab Emirates |
5,560 | 5,560 | 0.556 | 1.06% |
| Uruguay |
||||
| Unallocated Shares | 473,060 | 473,060 | 47.306 | |
| Grand Total | 1,000,000 | 1,000,000 | 100.000 | 100.00% |
What the Bank Does
Projects the Bank Funds
The NDB mainly focuses on helping with projects that build important things like roads, bridges, and power plants. About two-thirds of its funding in its first five years went to these kinds of projects.
The bank really wants to support projects that use renewable energy sources, like solar or wind power. It also wants to work with other groups to increase "green" financing and protect the environment.
The NDB is interested in funding projects that meet high environmental standards. This includes projects in energy, railways, and highways. The bank also wants to fund projects that are profitable and benefit local people and the environment.
The leaders of the member countries want the bank to quickly find and approve good projects. They want the bank to respond fast to what its members need.
As of March 6, 2019, the NDB had approved 30 projects, lending about $8 billion. The bank has also started lending directly to projects in Brazil, South Africa, and Russia, not just to governments.
Bonds the Bank Issues
In March 2016, the NDB announced it would sell bonds in China to raise money there. This happened in July 2016 when the NDB successfully sold its first "green financial bond." It raised 3 billion Chinese Yuan (RMB) over 5 years. The NDB was the first international financial group to sell a green bond in China. The money from these bonds is used for building projects and sustainable development in member countries.
In February 2019, the bank sold another 3 billion RMB bond in China. On May 18, 2022, the NDB issued a very large 7 billion RMB bond in China. This was the biggest bond ever sold by a foreign group in that market. It received high credit ratings of AA+ from S&P and Fitch.
Working with Other Banks
How the NDB Cooperates
The NDB was created to work alongside other international and regional financial groups. It wants to help with global growth and development. The NDB is allowed to work with other international organizations and national groups, especially other financial institutions and development banks.
The NDB President, K.V. Kamath, has said that the bank sees other international financial groups, like the IMF and World Bank, as partners, not rivals.
Asian Development Bank
In July 2016, the NDB and the Asian Development Bank (ADB) agreed to work together. They want to co-finance projects and share knowledge. This includes projects in renewable energy, clean transportation, and water management.
Asian Infrastructure Investment Bank
Some people thought the Asian Infrastructure Investment Bank (AIIB) and the NDB might compete. However, there is no real sign of competition between them.
Officials from NDB member countries point out that the NDB and AIIB have different member countries. They also believe the banks can work together to meet the needs for development and infrastructure.
A representative from the NDB said that the NDB and AIIB are like "sister institutions." They have similar goals but focus on different regions. The NDB focuses more on BRICS countries. Both banks aim to develop infrastructure and care about sustainable development. Since there's a huge need for funding, there's "space for newcomers" like them.
In February 2016, the NDB president said not to worry about the AIIB and NDB having similar goals.
World Bank
Other big development banks, like the World Bank Group, have also said they want to work with the NDB.
In September 2016, the NDB and World Bank Group signed an agreement to cooperate. They announced that they would mainly work together on infrastructure projects.
Partnerships and Agreements
With Other Big Development Banks
- World Bank
- Inter-American Development Bank (IDB)
- Financial Fund for the Development of the River Plate Basin (FONPLATA)
- European Bank for Reconstruction and Development (EBRD)
- Asian Infrastructure Investment Bank (AIIB)
- Caribbean Development Bank (CDB)
- Eurasian Development Bank (EDB)
- International Investment Bank (IIB)
- Development Bank of Latin America and the Caribbean (CAF)
- Asian Development Bank (ADB)
- Islamic Development Bank (IsDB)
- European Investment Bank (EIB)
With National Development Banks
- Development Bank of Southern Africa (DBSA)
- Agricultural Development Bank of China (ADBC)
- Exim Bank of China
- China Development Bank (CDB)
- Brazilian National Bank for Economic and Social Development (BNDES)
Bank's Logo and Meaning
The logo of the New Development Bank looks like a Möbius strip. This shape represents the idea of constant change and transformation. It shows that the bank wants to improve the existing system from within, not just disrupt it.
The logo has a triangle moving at one end, which means balanced growth. The other end moves the opposite way and looks like a propeller, showing speed and energy. These two parts are connected by a wireframe, which looks like the basic structure of buildings and infrastructure. The logo is green, symbolizing sustainability. This constant movement in the logo shows the bank's values: being quick, creative, and always changing for the better.
Leaders of the New Development Bank
- Status
| # | Portrait | Name | Term | Nationality | Background | Notes |
|---|---|---|---|---|---|---|
| 1 | _Annual_Board_of_Governors%E2%80%99_Meeting,_in_New_Delhi_on_April_01,_2017_(Cropped).jpg) |
K.V. Kamath | May 11, 2015 – May 27, 2020 |  India |
Studied business at Indian Institute of Management, Ahmedabad; used to be the Chairman of Infosys Limited; also used to be the Non-Executive Chairman of ICICI Bank |
First President of the New Development Bank |
| 2 |  |
Marcos Prado Troyjo | May 27, 2020 – March 24, 2023 | Brazil |
A diplomat, economist, and sociologist; started and directed BRICLab at Columbia University; used to be Brazil's Deputy Economy Minister for Foreign Trade & International Affairs |
First Brazilian to lead a big international development bank |
| 3 |  |
Dilma Rousseff | March 24, 2023 – present | Brazil |
An economist from Federal University of Rio Grande do Sul; used to be the President of Brazil; also used to be the Chief of Staff of the Presidency in Brazil; and the Minister of Mines and Energy in Brazil. |
First woman to lead the New Development Bank |
| References: | ||||||
See also
- BRICS Contingent Reserve Arrangement
- Asian Infrastructure Investment Bank
