BRICS’ New Development Bank (NBD) will this week announce significant financial commitments to help South Africa bridge its infrastructure deficit as the bank’s Ninth Annual Meeting kicked off in Cape Town yesterday.
The meeting is set to provide a platform for discussing how the NDB, in collaboration with national governments, the private sector, civil society, and other development institutions, can enhance its ability to promote sustainable projects in emerging markets and developing countries.
The NDB this week said its key role in promoting infrastructure and sustainable development of its member countries was recognised in the Johannesburg II Declaration in March this year.
“By hosting our Annual Meeting in South Africa, we aim to connect, learn and reflect and deliver on the ask by our member countries to support effective financing solutions that bridge the infrastructure gap in emerging markets and developing countries – our core geographical mandate,” the NDB said in an emailed response to Business Report.
“During the 9th Annual Meeting, we will be making announcements to help address some crucial infrastructure challenges that South Africa is dealing with.”
Since starting operations of the NDB in 2015, NDB has approved more than 100 projects in its member countries amounting to $36.5 billion.
In South Africa, the NDB approved the first loan in 2016 for renewable energy and since then, has supported 13 projects with a total amount of $5.8bn.
The NDB said the projects focus on addressing crucial infrastructure needs such as water, energy, transport and logistic networks.
“A case in point is our financing of R3.2bn for the largest bi-national infrastructure project between South Africa and Lesotho – the Lesotho Highlands Water Project – which is providing two crucial development solutions: i. augmenting water supply for South Africa and ii. generating hydropower for the Kingdom of Lesotho,” the bank said.
“On deepening the local capital markets of our member countries, in August 2023, NDB issued its debut ZAR bond in South Africa, raising R1.5bn and becoming the highest rated issuer in the sub-Saharan market since 2015. In December 2023, NDB made another successful bond issuance of R1.3bn. In China, NDB is already the largest issuer in the Panda Bond market with total issuances amounting to RMB55.5bn.”
South Africa was the first member country where NDB opened its regional office outside of its head office in Shanghai in August 2017, followed by a progressive rollout of other regional offices being opened in other founding member countries.
The NDB started to expand its membership in 2021 and has admitted Bangladesh, Egypt, United Arab Emirates (UAE), and Uruguay to the bank.
The bank said the primary aspirations of the bank for the 2022-2026 period were reflected in six targets across the strategic imperatives of its strategy – mobilising resources, financing for impact, and institution building.
“We aim to provide $30bn in total volume of approved financing from our balance sheet over 2022-2026. We aim to dedicate 40% of the total volume of approvals to projects contributing to climate change mitigation and adaptation, supporting member countries’ transition to a more sustainable development path,” the NDB said.
“Local currency financing is an important part of our mission. Over the 2022-2026 period, we aim to mobilise 30% of total financing in local currencies. We aim to work closely with the private sector and expand our non-sovereign operations. By 2026, we aim to direct 30% of total financing to non-sovereign operations.”
The BRICS Business Council, which has been invited to attend the NDB meeting, said the gathering came at a pivotal time as South Africa continued to rebuild its economy.
Busi Mabuza, chairperson of the South Africa Chapter of the BRICS Business Council, said gaining insights into the bank’s plans and initiatives to sustainable support economic growth for both the public and private sectors would be a key takeaway for them.
Mabuza said the meeting offers a valuable opportunity for the bank to continue exploring financial cooperation opportunities, including bilateral investment agreements, and funding for energy and green projects, in collaboration with more DFIs and banks of the Global South.
“Deliberations should focus on advancing investment, infrastructure standards, and good green supply value chains in a manner that prioritises sustainable development for the benefit of global south countries.
“Finally, collaboration with major continental structures such as the AfCFTA will be a crucial initiative to strengthen and expand regional trans-national infrastructure projects, thereby accelerating intra-African economic growth.”
BUSINESS REPORT