Development Banks CAF and NDB Agree to Co-Operate More Closely
A memorandum of understanding has been signed between the Development Bank of Latin America (CAF) and the New Development Bank, formed two years ago by the BRICS nations.
Announced last week, the agreement formalises the interest of both financial institutions in working together and exchanging knowledge and resources to support infrastructure and development.
The memorandum was signed in Washington by CAF executive president Enrique García and NDB president Kundapur Kamath, on the sidelines of the XX Annual CAF Conference.
García said: “We’ve taken an extremely significant step towards embracing links between institutions which shows [the] generation of a new financial architecture to support more effective development in our countries, especially in the dynamic and challenging actual context.”
He added that initiatives like this enabled sustainable development projects to take place more readily “through better financial conditions and good practices that contribute to reducing social gaps”.
Kamath confirmed the partnership would enable NDB to “harness CAF’s profound experience in Latin America and help us strive toward our common development goals. The NDB will listen, learn, collaborate and contribute.”
He said the NDB aimed to make a positive difference by complementing the efforts of existing multilateral development banks.
According to a statement announcing the news, the agreement reflects the growing influence of emerging economies in the international financial development landscape.
The two bodies will now explore and carry out complementary work in strategic areas with real potential, including sustainable infrastructure, energy, water and sanitation, and the environment. Also, it opens up the possibility of co-financing development projects in countries of mutual interest, as well as providing technical assistance and promoting the exchange of knowledge through seminars and workshops.
The NDB was launched last year, forming perhaps the most substantial materialisation of the BRICS growing, collective power and influence on the world stage, especially as many of the countries’ once-strong economies began to stumble.
After signing its first set of loans last May, worth $811m, the bank also secured a cooperation deal with its well-established counterpart, the Asian Development Bank, in July.
By Emma Rumney
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