BRICS Bank to Launch Twin Bonds

New Delhi, April 14: The New Development Bank floated by the BRICS’ consortium plans to issue two bonds this year – a yuan denominated bond and a rupee denominated one – worth around 3 billion yuan and Rs 3,000 crore, respectively.

Officials said the bonds would be brought out after June.

“In all probability there would be a Rs 3,000-crore bond issuance by the New Development Bank (NDB),” finance ministry officials said.

The rupee bond will be the first such issue by the bank. The bank also has plans to float a rouble bond early next year, said officials.

The bank sold its first three billion yuan ($437 million) yuan-denominated bonds in China last July to fund clean energy projects in its member-states.

NDB president K.V. Kamath told China’s Xinhua news agency that after last year’s bonds, the preparation for the next batch of yuan-denominated bonds was expected to be more smooth.

The size will be similar to the last one, he added.

He said the issue will come after the bank is rated by international agencies.

Bank Agenda

Officials said the NDB would lend money for projects in members countries amounting to $2.5-3 billion. India has sought funds worth $2 billion.

However, officials do not expect more than $700 million in funding from the bank in the current year.

China wants the NDB to join hands with its Asian Infrastructure Investment Bank to invest in projects for its “one road, one belt” plan that envisages projects across a swathe of countries in Central Asia, West Asia, South East Asia and South Asia,

However, India and Brazil have been resisting such a move and would prefer member country projects only for the time being, said officials. “We too have a priority in funding our ‘spice route’ – a string of ports India has been toying with along the global ocean ways leading to Japan and China on the one hand and Europe on the other. However, this bank is about funding development within member countries for the time being.”

Member Criteria

Officials said some criteria were being worked out for new members, with priority to developing countries.

Brics would consider nations that are growing quickly or have grown consistently in the last ten years. It will also look at countries with credit ratings that are above-average or capable to contribute to the bank.

Officials said they want developing countries to hold 80 per cent equity and developed nations the rest.

Source: Telegraphindia

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