Update | BRICS bank readies debut bond issue for clean energy projects
New Development Bank to provide up to 4 billion yuan of bonds to fund green energy projects even as the 5 economies behind the institution diverge
The BRICS-backed New Development Bank will soon issue between 3 billion yuan (HK$3.5 billion) and 4 billion yuan in bonds in China, according to the lender’s vice-president and chief financial officer Leslie Maasdorp.
The first tranche from the Shanghai-headquartered bank, a tie-up between Brazil, China, India, Russia and South Africa, will be unveiled next month and mostly be related to “green energy and clean energy”, Maasdorp said on the sidelines of the Boao Forum for Asia.
The best chance for peaceful growth of the world economy … is for the rising economies to explore new institutional arrangements ... while also continuing to work within the established international order
The issue comes as the five emerging economies behind the bank are diverging. Growth in China is slowing sharply, Russia and Brazil are in recession, South Africa’s tiny economy has barely expanded, and only India is showing signs of robust development.
Marcos Troyjo, director of Columbia University’s BRICLab, said in Beijing last week that “Chindia” may be outperforming “Brussia” now, but “things can shift in a very short period of time”. Evidence of that was in India’s rise from “the sick man” to “the bright spot” in the group, Troyjo said.
Maasdorp agreed, saying the short-term macroeconomic and fiscal conditions in the five countries were “relevant but not material” to the bank’s future.
The long-term political and fundamental factors for the lender were still there, he said, and demand for infrastructure financing would offer huge potential for the bank.