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| New Development Bank (BRICS) | |
|---|---|
| Name | New Development Bank (BRICS) |
| Founded | 2014 |
| Headquarters | Shanghai |
| Members | Brazil; Russia; India; China; South Africa; others |
| President | (see article) |
| Lending currency | Multicurrency; local currencies |
New Development Bank (BRICS) is a multilateral development institution established by the leaders of BRICS at the 6th BRICS Summit held in Fortaleza in 2014 to finance infrastructure and sustainable development projects in BRICS countries and other emerging economies. The bank was inaugurated alongside the Contingent Reserve Arrangement and began operations in Shanghai with an initial subscribed capital agreed by the founding members Brazil, Russia, India, China, and South Africa. The institution operates within a global development finance landscape that includes counterpart institutions such as the World Bank Group, the International Monetary Fund, the Asian Infrastructure Investment Bank, and the European Investment Bank.
The idea for the bank emerged during high-level meetings among leaders including Dilma Rousseff, Vladimir Putin, Manmohan Singh, Xi Jinping, and Jacob Zuma at summits such as the 2012 BRICS Summit and the 2013 BRICS Summit. Founding agreements were negotiated through diplomatic channels including the Ministry of Finance (Brazil), the Ministry of Finance (Russia), the Ministry of Finance (India), the People's Bank of China, and the National Treasury (South Africa). The founding treaty was signed at the 6th BRICS Summit and ratified by national legislatures such as the National People's Congress of China, the Federal Assembly (Russia), the Parliament of India, the National Congress of Brazil, and the National Assembly of South Africa. Early operational leadership drew on figures with experience at the World Bank, the Asian Development Bank, the Inter-American Development Bank, and the United Nations Development Programme.
Governance is vested in a Board of Governors composed of finance ministers and central bank governors from member states, a Board of Directors with professional management, a President of the Bank as chief executive, and a Vice Presidents cadre. The bank's internal organs mirror models from the International Bank for Reconstruction and Development and the International Finance Corporation, while adopting decision-making practices influenced by New Development Bank founding charters and protocols used by the Shanghai Cooperation Organisation and the G20. Operational guidelines reference standards from the Equator Principles, the UN Guiding Principles on Business and Human Rights, and environmental protocols like the Paris Agreement.
Initial subscribed capital of the bank was agreed among founding members Brazil, Russia, India, China, and South Africa with paid-in schedules and callable capital arrangements similar to those of the International Monetary Fund. Prospective expansion and admission procedures have involved negotiations with aspirant members and observer entities including representatives from Argentina, Egypt, United Arab Emirates, and others. Capital allocation, voting share, and quota discussions have attracted comparisons to reform debates at the World Bank and the IMF, and to capital subscription models at the Asian Infrastructure Investment Bank and the BRICS Contingent Reserve Arrangement.
The bank finances projects through loans, guarantees, equity investments, and local currency operations modeled on practices used by the European Bank for Reconstruction and Development, the African Development Bank, and the Inter-American Development Bank. Project portfolios have included transport corridors, energy facilities, urban development, and sustainable infrastructure in cities such as São Paulo, Moscow, New Delhi, Beijing, and Cape Town. Co-financing partnerships have been established with institutions including the Asian Development Bank, the World Bank Group, the New Development Bank's private sector partners, and sovereign funds like the China Development Bank and the Brazilian Development Bank. Project appraisal, procurement, and implementation procedures reference templates used by the Multilateral Investment Guarantee Agency and the European Investment Bank.
Lending instruments include long-term loans denominated in multiple currencies, local currency financing, and lines of credit patterned after instruments from the International Finance Corporation and the European Bank for Reconstruction and Development. The bank has published lending criteria that reference safeguards from the World Bank's environmental and social frameworks, the Equator Principles, and standards promulgated by the International Labour Organization. Risk management systems draw on practices employed by central banks such as the People's Bank of China and regulatory frameworks from authorities like the Financial Stability Board and the Bank for International Settlements.
The institution engages in formal and informal cooperation with the World Bank Group, the International Monetary Fund, the Asian Infrastructure Investment Bank, the United Nations, the G20, and regional development banks including the African Development Bank and the Inter-American Development Bank. Memoranda of understanding and project-level co-financing have connected the bank with agencies such as the United Nations Environment Programme, the World Wildlife Fund, and the Green Climate Fund. Strategic dialogues have taken place alongside summits including the BRICS Summit, the G20 Summit, and sessions of the United Nations General Assembly.
Critics have raised concerns about transparency, governance parity, environmental and social safeguards, and geopolitical implications, drawing parallels to controversies faced by the World Bank and the Asian Infrastructure Investment Bank. Questions about project selection, procurement standards, and influence of major shareholders such as China have been debated in fora including the BRICS Summit and academic analyses from institutions like Chatham House, the Brookings Institution, and the Carnegie Endowment for International Peace. Legal and compliance reviews reference case studies from disputes involving the International Centre for Settlement of Investment Disputes and procurement challenges similar to those encountered by the Inter-American Development Bank.
Category:International development banks Category:BRICS