New Delhi: The New Development Bank (NDB), established by the BRICS countries (Brazil, Russia, India, China, and South Africa), has announced its plans to issue its inaugural Indian Rupee bond by October, according to the Chief Operating Officer, Vladimir Kazbekov. This revelation was made during a press briefing held in Johannesburg as part of the ongoing BRICS Summit, which is set to continue until August 24.
Kazbekov revealed, "We're going to tap the Indian market – rupees – maybe by October in India." However, he refrained from specifying the exact size of the Indian rupee bond program, though reports indicate that the decision-making process for this move is currently underway. The NDB, which was established in 2015 as a significant achievement of the BRICS nations, aims to bolster its lending capabilities in local currencies. In line with this objective, the bank recently issued its inaugural rand bond in South Africa. Additionally, the COO highlighted the possibility of considering local currency issuance in member countries like Brazil, Russia, and the United Arab Emirates.
Kazbekov further discussed the NDB's strategy to employ member countries' currencies for funding projects within the organization. For instance, he suggested financing a project in South Africa using the Chinese yuan (CNY) instead of the U.S. dollar (USD). The NDB aims to enhance its local currency lending from around 22% to 30% by 2026, with an emphasis on reducing dependency on the USD. Currently, the majority of its lending activities are denominated in Chinese yuan.
The bank's commitment to support South Africa's transition from coal-based energy to renewable sources was also highlighted. Kazbekov affirmed the bank's pledge to provide $3 billion for this purpose, though he acknowledged the lack of concrete projects to support this commitment. Efforts are underway to identify suitable projects aligned with this commitment.While the NDB has made significant strides in its mission, its lending process has encountered some challenges, resulting in a relatively slower pace. The ongoing 15th BRICS Summit, hosted in Johannesburg, is providing a platform for discussions and collaborations among member countries to address these challenges and further enhance the NDB's operational efficiency and impact.
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