NEW DEVELOPMENT BANK

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Context

• Honduras President Xiomara Castro's formal request for the country's admission to the New Development Bank (NDB) led by BRICS.

Details

President Xiomara Castro's Official Visit to China:

• President Xiomara Castro of Honduras embarked on a six-day official visit to China.
• The purpose of her visit was to strengthen bilateral relations between Honduras and China.

Formal Request for Admission to the NDB:

• During her visit, President Castro held a meeting with the NDB President, Dilma Rousseff.
• President Castro formally requested Honduras' admission to the BRICS-led New Development Bank.
• The request signifies Honduras' interest in joining the NDB as a member country.

Significance of NDB Membership:

• Access to Funding: Membership in the NDB would provide Honduras with access to funding for infrastructure and development projects.
• Strengthened Ties: Becoming a member of the NDB would further strengthen Honduras' ties with the BRICS countries.
• Economic Opportunities: Membership in the NDB could present new economic opportunities for Honduras and promote its development goals.

About New Development Bank

• The NDB, also known as the BRICS Bank, is an international financial institution.
• It was established in 2015 by Brazil, Russia, India, China, and South Africa (BRICS countries).
• The bank's headquarters are located in Shanghai, China.
• Egypt joined the BRICS Bank as its fourth new member in December 2021.
• The other three new members are Bangladesh, Uruguay, and the United Arab Emirates.
• This expansion of membership is seen as a sign of the bank's growing importance as a multilateral development institution.

Objectives and Mandate:

• Development Financing: The primary objective of the NDB is to provide financing for infrastructure and sustainable development projects in member countries and other emerging economies.
• Complementary to Existing Institutions: The NDB aims to complement the work of existing multilateral development banks by focusing on areas that may be underserved or require additional funding.
• Promoting Sustainable Development: The NDB places emphasis on promoting environmentally sustainable projects that contribute to social and economic development.

Governance Structure:

• Shareholding: Each BRICS member country has an equal shareholding and voting rights in the NDB, with an initial subscribed capital of $50 billion.
• Board of Governors: The highest decision-making body is the Board of Governors, composed of finance ministers or central bank governors from each member country.
• Board of Directors: The Board of Directors, appointed by member countries, is responsible for day-to-day operations and strategic decision-making.

Funding and Operations:

• Project Financing: The NDB provides loans, grants, and other financial instruments to support development projects.
• Capital Increase: The bank has the ability to raise additional capital through bond issuances and attracting investments from other sources.
• Focus on Sustainable Infrastructure: The NDB prioritizes investments in sustainable infrastructure, renewable energy, transportation, and other sectors with long-term developmental impact.

Partnerships and Collaborations:

• Co-financing and Collaboration: The NDB actively seeks partnerships with other multilateral development banks, national development institutions, and private sector entities to co-finance projects and share expertise.
• Sustainable Development Goals (SDGs): The NDB aligns its operations with the United Nations' Sustainable Development Goals, working towards poverty eradication, social inclusiveness, and environmental sustainability.

https://theprint.in/world/honduras-requests-entry-to-brics-led-development-bank-on-china-trip-3/1621892/