Backgrounder: BRICS New Development Bank

On the first anniversary of the official opening of the BRICS New Development Bank (NDB), some early achievements have already been attained. As one of the most important components of the BRICS cooperation mechanism, the NDB has shown characteristics of being stable, efficient and pragmatic ever since its birth.

In June 2009, leaders of BRIC countries, i.e. Brazil, Russia, India and China, held their first meeting in Russia's Yekaterinburg, officially kicking off the cooperation mechanism among BRIC countries. The four leaders had also reached consensus on reforming international financial institutions.

In April 2010, BRIC leaders met in Brazil's Brasilia and urged the International Monetary Fund and the World Bank to address their legitimacy deficits and undertake a voting power reform.

In April 2011, BRICS leaders met for the third time in China's Sanya, with South Africa officially joining the mechanism. Governors of development banks from BRICS countries signed a framework treaty on financial cooperation, signalling the start of financial cooperation among BRICS members.

In March 2012, BRICS leaders discussed the possibility of establishing a BRICS development bank. In the same month the following year, BRICS members agreed to set up the development bank, and thought it possible to arrange a contingency reserve in the amount of 100 billion U.S. dollars.

In July 2014, BRICS leaders in Brazil's Fortaleza signed a treaty on the establishment of the NDB and a Contingent Reserve Arrangement (CRA). Under the treaty, the NDB, to be headquartered in China's Shanghai, will have an initial authorized capital of 100 billion dollars, and its initial subscribed capital of 50 billion dollars will be equally shared among founding members.

In July 2015, the board of governors of the NDB held their first meeting in Moscow to appoint members of the board of directors and the president and vice presidents, with K.V. Kamath from India as the first president.

On July 21 of the same year, the NDB officially opened in Shanghai. Projects in infrastructure and sustainable development were set to be the main focus of the bank.

In April 2016, the NDB approved its first set of loans valued at 811 million dollars for renewable energy projects in four of its member countries, one each in Brazil, India, China and South Africa, with an estimated reduction of greenhouse gas emissions of four million tons per year.

On July 18, 2016, the NDB issued three billion yuan (about 450 million dollars) worth of five-year green bonds, its first bond to raise funds worldwide for clean energy projects.

Two days later, the annual meeting of the bank's board of directors was held in Shanghai. Kamath said the NDB will closely follow the development of new energy and technology, and create more financing tools in the future. The NDB Africa Regional Centre will also open in South Africa's Johannesburg by the end of the year. Endi