The New Development Bank (NDB) set up by the BRICS countries will approve one project from each member nation in April followed by finalisation of about 10 to 15 projects, mostly green energy ventures, its President KV Kamath said on Friday.
Addressing media here in the Communist giant's financial hub ahead of signing of the bank's headquarters agreement with China on Saturday, Kamath said the NDB will commence funding by finalising a project from each of the BRICS (Brazil, Russia, India, China and South Africa) countries in April this year.
The bank was expected to finalise 10 to 15 projects during this financial year, he said. “We will do a full plate of projects in the next 9 to 10 months of this year,” he said. Kamath, who was accompanied by Russian Finance Minister Anton Siluanaov, the Chairman of the Board of Governors of the NDB, said the initial funding for the projects will be confined to the BRICS countries who have submitted a number of projects for consideration - mainly infrastructure and green energy projects.
The bank commenced its operations with initial subscribed capital of $50 billion with total paid of $10 billion. The founding members of the bank have already brought in capital of $one billion as initial contribution, a press release issued by the bank said.
Ruling out lending in concessional terms, Kamath said, “we will not be lending at concessional terms. This is not intention at all. We need to factor in cost of funds and add approbate margin and then lend.” “The cost of funds will be determined by our actual experience in the market. So we will function like a prudent bank should. Figure out cost of funds and add appropriate margin and lend. That is basis with which we will do business,” he said.
“We will be resorting to bond issues and raise local currencies where ever it is feasible. Of course where it is required we will supplement with dollar bond issues,” he said responding to question.
The NDB is also strategising its linkages and coordination with the China backed Asian Infrastructure Investment Bank (AIIB) which has taken off with with 57 members including India to avoid overlapping of interests.