The New Development Bank (NDB) established by BRICS have planned to provide lending for innovative technological projects. The bank was established with an objective to meet the financial needs of the emerging economies. Last year the bank approved loans of worth $1.5 billion to provide funding for clean energy and infrastructure development plans in BRICS states. NDB financed projects in the field of clean energy and green infrastructure because BRICS Bank believes that other than moral necessity these projects also significantly contribute to economic development. Such as in developing countries cost of renewable energy is at parity with the cost of fossil fuel. Similarly going green is not an only environmental concern but it is also making commercial sense in developing countries as well. Countries are leapfrogging for the adoption of green technologies.
The share of BRICS in the world economy has raised from 8.2% in 2002 to 22.2% in 2015. BRICS is two third of the economy of developing the world.
The term BRICS was initially formulated in a report on growth prospects for the economies of Brazil, India, and China by economist Jim O’Neill, in 2001. Now BRICS is a strategic partnership of five countries including Brazil, Russia, India, China and South Africa. Later on, the BRICS cooperation gained density and develop a broad agenda for the financial and economic development of member countries.
In the 6th Summit BRICS established the new development bank with an objective to fiancé infrastructure and sustainability development projects not only in BRICS but in other developing countries as well.
The New development Bank (NBD) formerly known as BRICS development bank was established as a multilateral development bank in 2014 by the cooperation of BRICS states. The NBD bank was established with an objective to promote infrastructure and sustainability development projects. NBD was designed to establish an extensive network of global partnership with other multilateral development institutions and national development banks. The bank was established with an initial fund of USD 100 billion which was pooled from five BRICS countries. It has been identified that NBD is a worthwhile venture set up by BRICS countries. It is a primary platform which will continuously play a significant role in global economic and political development.
The core objective of the development NDB was to foster technological innovation in developing nations. The bank through financing, capability building, and knowledge sharing is significantly contributing to technological innovation in developing economies. According to the president of NDB, such lending priority of the bank will lead it towards the development of a new path twards financial development which is different from the traditional multilateral financial institutions.
Developing nations constitute 35% of the world economy. Over the past fifteen years, the field of international development is going through tectonic shifts. Traditional multilateral financial institutions are providing assistance for the development, but the emerging economies are also significantly contributing to international development. In this regard, New Development bank developed by the cooperation of BRICS states is playing a most significant role. It has been identified that trillion of dollars are required every year for upgrading the industries and for the development of new energy sector every year. Upgrading the industrial sector and development of new energy sector is the top priority of BRICS NDB.
NDB have played a critical role in the technological development of china. The country is well known for accumulating wealth of experience in technological innovation on infrastructure projects. As a member state of BRICS, the country is ready to share such vast experience with other developing countries for technology and infrastructure development of those countries. BRICS NDB is categorized as a knowledge bank, and it would facilitate the new technological projects through financing and knowledge sharing.
High-quality loans to favor the technological projects is the priority of the NDB Bank because it would play a significant role in growth and development of the developing countries. BRICS NDB bank by making the funding available for technological projects is contributing to infrastructure and sustainability development. This institution in public and private sector is serving as a complement, not as a substitute to meet the financial needs of emerging and developing economies. The existence of NDB is well known for strengthening the voice of developing and emerging economies in technology and infrastructure development.