The New Development Bank formed by the BRICS nations last year plans to more than double its commitment to support infrastructure projects to the tune of $2.5 billion in 2017, its president K V Kamath said today.
“We are targeting incremental lending of $2.5 billion over next year and we believe it will be largely in the sustainable and green infrastructure,” Kamath said at the BRICS Business Council as part of the two-day summit of the BRICS leaders here.
He said the multilateral lender, which started operations last year, has made commitments of $911 million in this year and hopes to close 2016 with $1 billion.
Keeping the commitments and the actual lending in mind, NDB has drawn up a plan to raise $1.5 billion from multiple sources next year, said the noted banker, who built ICICI Bank into the second largest lender in the country in a span of a decade.
While expanding the lending activities, Kamath said the bank will seek to reduce the cost of borrowing for the member-countries by doing local currency borrowings which does not require any hedging.
It has already done 3 billion yuan ($450 million) in China, as part of a Beijing-approved plan to raise 10 billion yuans in the medium-term, he said, adding it will adopt a similar strategy in other markets as well.
India, where it has committed up to $250 million already, will be among the first countries where it plans to raise money in local currency, Kamath said, adding that a rupee bond issue will be done in the first half of next year.
The Shanghai-headquartered bank is also ramping up its staff and plans to take the head count to 350 over the next three years from the present 60, Kamath said.
Work on creating a centre in South Africa is on track and it will be opening this quarter itself, Kamath said.
The NDB, which will have a capital of $100 billion eventually, has been receiving equity funding from member states as per schedule, he said, adding Russia, China and South Africa have already paid two years’ of their commitment in advance.
Stressing on the need for forging partnerships, Kamath also urged the BRICS leadership to recommend the NDB as an observer at the UN General Assembly.