BRICS Bank to finance Indian, Chinese infrastructure projects

Traffic moves on a busy road in Mumbai.

Traffic moves on a busy road in Mumbai.

The New Development Bank set up by BRICS countries has approved its financing plan for 2017, worth $2.5 billion, including two infrastructure projects in China and India.

The New Development Bank (NDB) of the BRICS countries (Brazil, Russia, India, China, South Africa) is set to finance two more projects in the energy and road construction sectors, in China and India, to the tune of $640 million. The bank has given loans mainly to projects in the green energy sphere, but next year, the bank’s management promises to expand spheres of investment, and finance $2.5 billion worth of projects.

The NDB’s board of directors approved two additional loans on Wednesday; to China and India. The first was in yuan for a project in the wind power sector; the Putian Pinghai Bay Offshore Wind Power Project (2 billion yuan, or $290 million); while the second is to repair 1,500 km of roads as part of the Madhya Pradesh Major District Roads Project ($350 million).

The bank has so far approved seven projects, totaling $1.5 billion. In addition, the board of directors approved the bank’s financing plan for 2017, in which it stated that the bank is ready to finance another $2.5 billion worth of projects.

“In accordance with the Bank’s mission, these projects should contribute to the creation of infrastructure and sustainable development,” the press release stated.

The agreement to create the NDB, with its headquarters in Shanghai, was signed during the BRICS Summit in Brazil in 2014. In July 2015, at Ufa, the agreement was ratified by all countries, yet the bank only started working in February 2016. So far, the member states have contributed $1.5 billion each to the bank’s capital, while the maximum amount of capital is set at $100 billion. Next year, the bank plans to offer bonds on the market, denominated in Indian rupees, Russian rubles and the South African rand.

Earlier, Kundapur Vaman Kamath, head of the bank, promised to expand the range of projects, noting that in Russia, the priority investments will be into the creation of roads and railways infrastructure.

The only project in Russia is joint financing, with the Eurasian Development Bank, of construction of two small hydroelectric power stations in Karelia – the Byeloporozhskaya GES-1 and Byeloporozhskaya GES-2. This project, with total investments of 11.8 billion rubles ($180 million), is being carried out by the Nord Hydro Company. The construction work on the power plant should be complete by the end of 2019.

The NDB is also considering allocating credit of $1 billion for construction of a high-speed rail (HSR) line from Moscow to Kazan, earlier announced by Alexander Misharin, the First Vice President of Russian Railways. However, the BRICS Bank requires the involvement of other development banks, he noted.

First published in Russian by Kommersant.

All rights reserved by Rossiyskaya Gazeta.

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