Brazil, Russia and South Africa trail in borrowings
India and China have each taken 28% of the US$15.2 billion loans given by the Shanghai-headquartered New Development Bank (NDB) as of 15 Jan 2020, said S&P Global Ratings on 28 Feb 2020.
The majority of loans taken by the two countries reflect that their fellow members in the NDB, Brazil, Russia and South Africa lacks bankable projects, said the rating agency.
The founding members back the institution with a considerable subscribed capital base of US$50 billion, of which US$10 billion represents paid-in amounts to be funded in full by January 2022. Each member is to contribute an equal share of 20% of the capital.
“Our views on NDB’s role and mandate are underpinned by the pressing need for infrastructure investment in BRICS countries.
“Over the next couple of years, we expect the institution to make significant strides in contributing financing and mobilizing resources toward that end,” said S&P.
NDB has charted an aggressive growth trajectory in its strategy for 2017-2021 which, if successful, would further underpin the institution’s role and importance.
Established by the five countries (BRICS) under an international treaty in 2014, NDB commenced operations in 2015.
S&P has affirmed ‘AA+/A-1+’ foreign-currency issuer credit ratings on NDB.
The stable outlook reflects expectation that NDB will continue to emerge from its start-up phase over the next 24 months, supported by its extremely strong financial profile, said S&P. fiinews.com
