The New Development Bank set up by the Brics bloc expects to start lending in the second quarter of next year‚ according to bank vice-president Leslie Maasdorp.Brics groups five of the biggest emerging markets – Brazil‚ Russia‚ India‚ China and South Africa – totalling about 30% of global gross domestic product.
Tuesday’s announcement is expected to benefit South Africa‚ whose multibillion-rand infrastructure and development projects‚ particularly in the energy and water sectors‚ need funding.
Eskom chief executive Brian Molefe has already indicated that he will approach the bank once it is operational to borrow money for its infrastructure development programme. The utility is building two new power stations to add energy to an under-pressure grid.
Processes to ensure the bank will meet its “ambitious target” of starting to lend in the second quarter of next year are well under way‚ Maasdorp said on the sidelines of a Department of International Relations and Co-operation lecture.
“The most important function now is to look at how can we raise fresh capital because in the next few weeks we will get the first paid capital from the five member countries‚” Maasdorp said.
Another important priority for the bank at the moment is assessing the quality of projects member states have identified as those needing financing.
Maasdorp‚ a South African‚ is the bank’s chief financial officer and is responsible for the treasury and portfolio management as well as the finance‚ budgeting and accounting functions.
The bank opened its headquarters in Shanghai‚ China‚ in July‚ two years after the idea to establish it emerged. It has a board of directors‚ a president (Kundapur Vaman Kamath) and four vice-presidents. Each member state will initially contribute $10-billion in installments.
Maasdorp‚ Kamath and other officials are in the country to discuss the logistics around the establishment of the bank’s regional offices‚ which will be based in Johannesburg.
The bank will initially mainly lend to member states and will extend lending to other countries once more capital has been raised. It is understood interest rates on loans will be cheaper than at other global finance institutions such as the World Bank.
This will work particularly in South Africa’s favour given its rising debt levels and increasing borrowing costs.
The four vice-presidents were last week allocated responsibilities and more staff are expected to be employed soon.
Kamath said the bank preferred to partner existing development finance institutions rather than to compete with them. Some believe leaders in emerging countries wanted to create a bank to rival traditional global lenders such as the World Bank and the International Monetary Fund‚ which normally attach conditions such as political‚ social and economic reforms to their loans.
The bank’s main aims included raising capital‚ building partnerships and speedy implementation of targets‚ Kamath said.
It is projected that the South African government will spend about R800-billion on infrastructure development over the next three years‚ particularly in energy‚ transport and social infrastructure.
The government and state-owned enterprises have already spent more than R1-trillion on infrastructure development over the past five years.
Brics bank set to open next year
Brics groups five of the biggest emerging markets – Brazil‚ Russia‚ India‚ China and South Africa – totalling about 30% of global gross domestic product.
Tuesday’s announcement is expected to benefit South Africa‚ whose multibillion-rand infrastructure and development projects‚ particularly in the energy and water sectors‚ need funding.
Eskom chief executive Brian Molefe has already indicated that he will approach the bank once it is operational to borrow money for its infrastructure development programme. The utility is building two new power stations to add energy to an under-pressure grid.
Processes to ensure the bank will meet its “ambitious target” of starting to lend in the second quarter of next year are well under way‚ Maasdorp said on the sidelines of a Department of International Relations and Co-operation lecture.
“The most important function now is to look at how can we raise fresh capital because in the next few weeks we will get the first paid capital from the five member countries‚” Maasdorp said.
Another important priority for the bank at the moment is assessing the quality of projects member states have identified as those needing financing.
Maasdorp‚ a South African‚ is the bank’s chief financial officer and is responsible for the treasury and portfolio management as well as the finance‚ budgeting and accounting functions.
The bank opened its headquarters in Shanghai‚ China‚ in July‚ two years after the idea to establish it emerged. It has a board of directors‚ a president (Kundapur Vaman Kamath) and four vice-presidents. Each member state will initially contribute $10-billion in installments.
Maasdorp‚ Kamath and other officials are in the country to discuss the logistics around the establishment of the bank’s regional offices‚ which will be based in Johannesburg.
The bank will initially mainly lend to member states and will extend lending to other countries once more capital has been raised. It is understood interest rates on loans will be cheaper than at other global finance institutions such as the World Bank.
This will work particularly in South Africa’s favour given its rising debt levels and increasing borrowing costs.
The four vice-presidents were last week allocated responsibilities and more staff are expected to be employed soon.
Kamath said the bank preferred to partner existing development finance institutions rather than to compete with them. Some believe leaders in emerging countries wanted to create a bank to rival traditional global lenders such as the World Bank and the International Monetary Fund‚ which normally attach conditions such as political‚ social and economic reforms to their loans.
The bank’s main aims included raising capital‚ building partnerships and speedy implementation of targets‚ Kamath said.
It is projected that the South African government will spend about R800-billion on infrastructure development over the next three years‚ particularly in energy‚ transport and social infrastructure.
The government and state-owned enterprises have already spent more than R1-trillion on infrastructure development over the past five years.
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