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NDB Successfully Registers RMB 10 Billion Bond Programme In China Interbank Bond Market

The New Development Bank (NDB) has successfully obtained the Letter of Registration (Zhong Shi Xie Zhu, 2019 No. RB1) of an RMB bond programme in the China Interbank Bond Market from the National Association of Financial Market Institutional Investors (NAFMII) on January 9, 2019. The NDB has been granted approval to raise up to RMB 10 billion in the China interbank bond market within 2 years of the Programme registration date. The proceeds of the Programme will be used to finance infrastructure and sustainable development projects in the Bank’s member countries.

The NDB is the first issuer to establish an onshore RMB bond programme according to the Interim Measures for the Administration of Bond Issuance by Overseas Institutions in the National Interbank Bond Market under the People’s Bank of China and Ministry of Finance Announcement [2018] No.16 (the Measures) issued on September 25, 2018.
Industrial and Commercial Bank of China Limited, Bank of China Limited, Agricultural Bank of China Limited and China Construction Bank Limited have been appointed as the joint lead underwriters of the Programme.


Bond offerings under the Programme will be eligible to institutional investors in the China Interbank Bond Market as well as offshore RMB investors through the Bond Connect scheme between Mainland China and Hong Kong.
Registration of the Programme reiterates the Bank’s commitment to becoming a regular issuer in China with a strong credit history in order to ensure better liquidity and diversification for investors.

“NDB will contribute to the development of financial markets in its member countries and raise funds not only in hard currencies but also in local currencies,” said Mr. Leslie Maasdorp, NDB VP & CFO. “We view China Interbank Bond Market as a very promising market that will offer the NDB an additional source of liquidity on an ongoing basis, supporting the growth of our investments in infrastructure and sustainable development projects in line with the Bank’s mandate,” he added.

In July 2016, the NDB successfully issued the first onshore bond in China for an amount of RMB 3 billion (approx. USD 450 million) and a tenor of 5 years. It was the first time that an international financial institution issued a green financial bond in the China interbank bond market and it was also the first time for the NDB to tap the capital market. The issuance was regarded as a great success, with the total subscription amounting to more than RMB 9 billion and the participation of more than 30 investors.


-New Development Bank 

New Development Bank has financed South Africa with more than R9 Billion

Financial Minister Tito Mboweni revealed that South Africa has received R9.8 Billion from the BRICS New Development Bank. The reveal stemmed from a parliamentary question on South Africa’s benefits from the New Development Bank membership.

Many critics believe that South Africa doesn’t equally gain as much as it’s  BRICS counterparts, when it comes to the BRICS bank. The bank has pledged to offer equal financing for projects in all BRICS member states.

Minister Mboweni also pointed out that there are 18 South African professionals who are employed by the bank at the South African office, as well as the Chinese office. Some of the projects funded by the NDB were a loan to Transnet of R2.8 Billion for a container terminal, the other R2.6 Billion to Eskom for transmission lines and a substation for Soweto.

 

Source: businesslive.co.za

 

 

Key milestones of the New development Bank (NBD)

The BRICS multilateral development bank was founded by members of the coalition [Brazil, Russia, India, China and South Africa],in July 2015.  The bank’s main focus since establishment has been on infrastructure and sustainable development projects in member states, as well as in other emerging and developing countries, to promote growth and seek solutions for sustainable development.

Since establishment the NDB has continued to show growth, despite wide criticism from the media – many publications have prophecies on the failure of the bank. 

 

Year Key milestones
2016
  • The headquarters agreement was signed with the government of the People’s Republic of China
  • The NDB received AAA rating from two Chinese rating agencies
  • The Board of directors approved the project in Russia, to the amount of USD 100 million  
  • NDB issued its first green bond in the Chinese interbank bond market
  • The Board of Directors approved the first batch of loans to projects in Brazil, India, China and South Africa at a combined value of USD 811 million
  • The Board of Directors authorised NDB to raise resources up to an aggregate amount of RMB 10 billion
2017
  • The Board of Governors approved the establishment of the Project Preparation Fund (PPF)
  • The Board of Governors approved the terms, conditions and procedures for the admission of new members
  • The Board of Governors approved NDB’s 2017-2021 General Strategy
  • NDB held a ground breaking ceremony for its permanent headquarters in Shanghai, China
  • NDB opened its first regional office in Johannesburg, South Africa
2018
  • The NDB financed two Brazilian renewable energy projects
  • NDB received AA+ rating from Fitch and S&P global ratings
  • The bank joined forces with FAO in attempt to reach the 2030
  • It opened its doors to all states, including nonmembers  
  • Signed a memorandum of agreement with the development bank of South Africa

 

 

By: Kgothatso Nkanyane

Emerging market crisis – the BRICS Bank makes headway

 

Formerly referred to as the BRICS Bank, the New Development Bank (NDB) was founded just over three years ago. The BRICS has been a receiving a lot of criticism over the years – it was dismissed a label as a marketing acronym.

With the current cloud hanging over emerging markets the bank is surprisingly making headway. South Africa slipped into an unexpected recession earlier in the month, Brazil and Russia’s economies are still recovering. “A sharp fall in the rupee reflects jitters about India” – the Economist. China is currently in a trade war with the US.

The bank aimed at reshaping world development finance, has been constantly compared to the Asian Infrastructure Investment Bank (AIIB) which was launched after the NDB. The BRICS Bank was viewed to be of lesser influence and effectiveness.

The Economist. Com at a closer look inspect both financers and noticed the following; both banks are busy as each other. The New Development Bank has approved $5.7bn in loans and the AIIB has approved $5.3bn. Both the NDB and the AIIB are adding to their ranks daily. Both have international credit rating, three rating agencies rated AIIB triple -A scores last year. The NDB was rated S&P and Fitch AA+ in August.

The BRICS bank is gaining traction and has been admired by economists. “Why do we need another World Bank? The AIIB looks a lot like what’s out there. The NDB is looking more innovative” says Gregory Chin, economic diplomacy specialist at the University of Canada.  Chin added by saying that the BRICS walls are shaky, but the banks looks more solid.

 

Source: The Economist

The New Development Bank (NDB) executes projects successfully

The New Development Bank (NDB), run by a group of emerging economies , BRICS (Brazil, Russia, India, China and South Africa) has been successfully implementing projects says the bank’s senior manager.

BRICS bank vice president, Vladimir Kazbevov told Russia’s state news agency, TASS that the bank has approved 23 projects for all BRICS countries.  “Their total cost is 5.7 billion. By the end of the year, I think another 1.5 billion dollars will be added. Next year, we plan to expand projects to somewhere around 7.5 billion dollars” says the New Development Bank President.

The NDB has received AA+ rating from Standards & Poor’s and Fitch agencies. According to Kazbevov the rating is enough confidence for the NDB to enter the international financial market.

The bank’s capital is being boosted every year. “Next year, the plan is 7,5 billion dollars. And according the strategy, in my opinion, by 2022 we should have about 44.5 billion dollars in capital. Our capital is being formed quite on schedule, Russia and China are contributing ahead of time” he added.

The banks capital is approximately 100 billion dollars and it says all members of the United Nations can join it, but BRICS nations can never have less than 55 percent of the voting power.

 

Source: Reuters

S&P rates Brics New Development Bank AA+

Financial services company, Standard and Poor’s (S&P) has ascribed an ‘AA+’ long-term and ‘A-1+’ short-term issuer credit ratings on the New Development Bank (NDB).

S&P released a statement saying that the ratings mirror the agency’s opinion. The BRICS bank will establish itself “as a catalyst in reducing the infrastructure deficits faced by its BRICS members,” said Standard and Poor’s.

The NDB has been assessed by the rating agency as having a “extremely strong” financial profile. The agency took in consideration the dependable support from the NBD shareholders.

“Today marks a momentous step for NDB towards establishing itself as a premier multilateral development finance institutions” K.V Kamath, President of NDB, on rating announcement.The NDB president said: “Given the scale of our future ambitions, AA+ rating from S&P and Fitch, put the Bank in an exceptional position to mobilise financial resources at competitive rates thereby greatly enhancing our leading capacity to our members”.

The BRICS bank also received the highest AAA rating from Chinese rating agencies – Chengxin international credit rating and China Lianhe Credit rating.

 

 

Source: Tass

African leaders want a share in the BRICS pie

Through the growth of BRICS, we have seen an increase in partnerships between the bloc and emerging economies. At the 2018 BRICS Summit which was held in South Africa in July, the African continent saw inclusivity under the BRICS-Africa Outreach programme. Seven African President were invited to the Summit, as BRICS aimed to reach out to fellow developing and emerging market economies. BRICS leaders interacted with African leaders to find ways on how best they can bring about the “inclusive growth” and “shared prosperity” as per the Summit’s theme.

At the Summit, President of Rwanda, Paul Kagame, who is also the Chair of the African Union, emphasised that “strengthening cooperation with BRICS contributes to medium and long-term human security and wider benefits, especially employment, for Africa’s young population.” The AU wants to strengthen its partnership with the BRICS countries and Kagame stated that the goals of the partnership will be to collaborate on key sectors like industrialisation, infrastructure, peace and security; which are of importance on the African Union agenda for 2063.

Malawian President Peter Matharika agreed with President Kagame, stating that the BRICS New Development Bank is a key that will ensure that the Malawi infrastructure master plan will be possible. The President commended South Africa for including African countries with the Summit’s African Outreach. Many African countries need structures that will ensure that the interest of developing and emerging economies are put ahead in global economies.

In his view, Namibian President Hage Geingob added that Africa is counting on the support of BRICS, in order overcome its many challenges. He said: “Africa has strong, trusted and reliable partners. In our endeavours to move forward, we need partners to support Africa.”

The BRICS and Africa partnership comes to Zimbabwe at an important time for their country, as the country looks at redevelopment. The new Zimbabwean President, Emmerson Mnangagwa took the partnership to fast-track their plans to develop “infrastructure, mining, agro-processing, light to heavy manufacturing, ICTs and financial sector.”

The BRICS countries have been Zimbabwe’s biggest allies in recent years, with China being the biggest investor in Zimbabwe, Russia commissioning a multi-million-dollar mining project, Brazil supporting agricultural reform in the country and South Africa being the biggest trade partner.

African leaders at the BRICS summit all indicated that the partnership brings practical development plans for African countries, as Gabonese President and chairperson of the Economic Community of Central African States, Ali Bongo Ondimba, said: “Resources are here, potential is here. We are ready to engage in a win-win partnership with BRICS. We have been shown the way, let’s sit down and talk for the good of our future and our children.”

By Ntsikelelo Kuse

SADC plans to team up with BRICS on infrastructure.

During the 10th BRICS Summit, the Southern African Development Community (SADC) sat with business leaders to discuss collaboration between Brazil, Russia, India, China and South Africa (BRICS) on industrialisation and infrastructure development.

The Executive Secretary of SADC,Stergomena Lawrence said SADC was very honoured to participate in the Outreach for the first time.

“It was an opportunity for us to engage but also to exchange views and ideas. It was a great experience for us.”

Lawrence said that the discussion explained opportunities between SADC and BRICS and how they can work together.

“SADC has prioritised on industrialisation and infrastructural development. Peace and security is also part of our priorities.”

She hopes that the New Development Bank Africa Regional Centre (NDB ARC)  in South Africa will assist financially with their upcoming projects.

“If you are talking about industrialisation or infrastructural development, you are also talking about investments.” Lawrence said.

“The problem when we talk about projects is to have projects that are bankable. Finances and investors are there but you need to have bankable projects that you can sell to your financers. “

She included some of the great opportunities between SADC and BRICS that are underway.

“I signed a memorandum of understanding with Russia on SADC corporate with the military. That is also good to help us enhance our cooperation in the peace and security area.” Lawrence said.

She mentioned that SADC is currently finalising cooperation framework with China.

“We move as part of the continent, we also believe that this kind of partnership which has been forged today is also going to enable SADC to contribute to continental integration agendas,”  Lawrence added.

Source: CNBC Africa

 

BRICS bank to boost South African loans by R8.1 billion

The New Development Bank (NDB) has intentions to loan approximately R8.1 billion more to South Africa, in a bid to attain symmetry among BRICS members.

The NDB, backed by BRICS, began operations in 2015 to aid infrastructure and sustainable development initiatives in emerging economies. The leaders of the fastest growing economies will be gathering in Johannesburg for the 10th BRICS Summit next week.

“Our aim is to be equitable among our five members,” NDB President KV Kamath said. “If you look at the $4 billion (R54 billion) we will be doing this year, we should be lending around $800 million” in each nation, he said. “I hope this year, we will hit that number.”

The formerly known BRIC Bank issued a statement in May saying that it loaned $200 million (R2.7 billion) to a state-owned South African ports and freight operator, Transnet to rehabilitate container terminals in Durban on the country’s east coast.
It will accelerate efforts to grow sustainable infrastructure in the continents most industrialised economy with two further loans, Kamath added. He said during an interview on Wednesday that one of the two loans will go to a bank, which will lend the funds for use in renewable energy developments. The other loan will be made available for critical infrastructure.

Separately, the NDB on Thursday activated a $180 million (R2.4 billion) loan to Eskom that had been dormant since 2016. The loan will be used to build transmission lines and a substation for the Soweto area to integrate renewable-energy projects from independent power producers, Anil Sooklal, South Africa’s Brics Ambassador told reporters in Johannesburg.

The Shanghai-based bank will also begin raising money and lending in South African rand to help insulate its clients from currency risk, Kamath said. It already does this in China.

Source: Money Web

Russia may borrow $1 billion from BRICS development bank – minister

 

Russia is in the process of negotiating a loan with the New Development Bank.

“With the New BRICS Development Bank alone we are now preparing four new loans,” said Russian Deputy Finance Minister Sergey Storchak, confirming that these loans would amount to slightly more than $1 billion.

The Russian Finance Ministry had set a target of raising around 1 trillion rubles ($16.08 billion) a year through selling OFZ treasury bonds in 2018-2020.

Storchak added that if Russia raises loans from foreign development banks, it may cut its OFZ treasury bonds programme in 2019, and that Russia would lower state borrowing via OZ bonds if it had an option to raise money for building roads and bridges from a development bank.
Russia has been raising funds for infrastructure.

Finance Minister Anton Siluanov said earlier this year that Moscow was creating a special fund worth 3 trillion rubles to finance the infrastructure projects over the next six years.

Source: Reuters Africa