Opening Ceremony of New Development Bank First Annual Meeting
On 20 July, the New Development Bank held the Opening Ceremony of its First Annual Meeting in Shanghai, China.
In his opening speech, Vice Premier of the People’s Republic of China Mr. Zhang Gaoli expressed confidence that the NDB will benefit all BRCIS nations as well as other developing countries. He highlighted that the Bank must have its own place as an international development institution, fully display its advantages and provide a strong support to BRICS nations and other developing countries. The Vice Premier stressed that the BRICS countries have tremendous development potential and are characterized by a complementarity of different resources, and therefore the NDB should make full use of the advantages its members offer. In his speech, the Vice Premier also stressed the importance of strengthening interconnectivity between members of the Bank and cooperation with other multilateral development banks.
The NDB President Mr. K.V.Kamath warmly welcomed the participants and guests. He thanked the Vice Premier for addressing the meeting and providing a whole set of pointers for the Bank as it charters a path forward.
“In this one year, we have put in place all our major operational policies and procedures. The Board has approved the first set of projects with a total commitment of USD 911 mln, which covers all our five member countries. All of these projects are broadly in an area of renewable energy and through our first set of loans the Bank has begun the process of establishing its credentials as an institution that supports green and sustainable infrastructure.”
In his speech, Mr. K.V.Kamath noted that the shareholders of the NDB demonstrated commitment to the Bank by ensuring necessary capital was paid in on time. He also mentioned the first Green Financial Bond issuance in the China onshore bond market by the NDB, with an issue size of RMB 3 billion at a very competitive rate. Moreover, the NDB President highlighted partnerships established by the Bank with other key institutions and the Africa Regional Center that will be opened later this year in Johannesburg.
According to Mr. K.V.Kamath, the NDB we will need to come up with new financial instruments, including local currency financing and lending, new collaborations with public and private sector, local and global institutions, a new set of human resource skills and an appropriate organizational structure ensuring that the entire institution works as one, and a new mindset of partnership with our members. “We will learn as we go along and make changes as necessary based on experience.”
“It is an exciting time to be a young multilateral development bank, one with a global mandate, one that has been established by members with a growing role in the global economy, one that looks to support sustainable development in its member countries, one that is keen to focus on the beneficial aspects of technology, and one that looks to innovate in everything it does.” “The NDB combines the energy of youth with the wisdom and experience of all the institutions that have preceded us,” highlighted Mr. K.V.Kamath. “We will strive to make a positive difference quickly and effectively,” he added.
The NDB Governor, South African Minister of Finance, Mr. Pravin Jamnadas Gordhan noted that in a remarkably short time the NDB made tremendous progress. “We on the African continent, which has the largest infrastructure deficit estimated to be some 100 bln dollars per annum, are proud to host soon the first regional centre of the NDB, he said. There are great expectations of the NDB regional centre that will be created by the Bank in South Africa as its potential capacity to significantly contribute to speeding up the much-needed infrastructure investment in energy, transport, logistics and social infrastructure such as schools and health facilities, stressed the Minister.
Chairman of the NDB Board of Directors, Secretary for International Affairs, Ministry of Finance of Brazil, Mr. Luis Antonio Balduino Carneiro expressed confidence that the NDB will help to promote closer ties between the BRICS countries. He noted that the Bank demonstrates the truly concrete cooperation that has been achieved by its members. At the same time, Mr. Balduino noted that there are challenges ahead and a lot of work is still to be done in order to consolidate the NDB as a new institution. He highlighted that the Bank needs to leverage private sector financing, work in partnerships and become a truly global organization.
The NDB Director, Deputy Minister of Finance of the Russian Federation, Mr. Sergei Storchak stressed that the Bank has become a part of a big family of multilateral development banks, showing that emerging markets can agree quite quickly and effectively on such an initiative. He expressed confidence that with the establishment of the NDB its members have embarked on providing a new orientation to the global financial system. Talking about future steps for the Bank, Mr. Storchak highlighted starting business operations with the private sector, working with sub-national governments and on public-private partnership projects.
The NDB Alternate Director, Joint Secretary of the Ministry of Finance of India, Mr. Raj Kumar stated that the NDB should play a catalytic role in investment in sustainable infrastructure. He stressed that the Bank should maintain its focus on speedy creation of infrastructure. At the same time, the NDB should develop a strong pipeline of projects, added Mr. Raj Kumar.
The NDB Governor, Minister of Finance of the People’s Republic of China Mr. Lou Jiwei stressed that the Bank should become a model institution for the 21st century. He also expressed his support to the recent Green Financial Bond issuance by the NDB. In his speech, the Minister highlighted strengthening South-South cooperation, developing channels for cooperation between BRICS nations in the financial sphere, broadening use of local currencies and engaging with the private sector as well as making the institution more efficient than its peers.
The New Development Bank was created with a vision to support and foster infrastructure and sustainable development initiatives in emerging economies. The Bank will complement the efforts of other existing financial institutions to realize the common goal of global growth. The founding members of the NDB – Brazil, Russia, India, China and South Africa (BRICS) – have brought in capital of USD 1 billion as initial contribution. Most of the policies and procedures for all functional areas of the Bank were approved at the Board of Directors meeting in January 2016. With the signing of the Headquarters Agreement with the Government of the People’s Republic of China and Memorandum of Understanding with Shanghai Municipal People’s Government in February, the Bank has become fully operational.