European development bank strikes pact with New Development Bank

The New Development Bank (NDB), set up by the BRICS countries, and the European Bank for Reconstruction and Development (EBRD) have agreed to collaborate on sustainable development and infrastructure projects in emerging markets of their regions of operations.

A Memorandum of Understanding (MoU) setting out a strategic framework for cooperation between the two development banks was signed last week during the second annual meeting of NDB in New Delhi by the presidents of the two institutions — EBRD's Suma Chakrabarti and NDB's K V Kamath.

"The EBRD believes that the global development goals can only be met through joint efforts by multilateral banks, donors and the private sector. As one of the youngest and still growing development banks, the EBRD has always been eager to offer its expertise and support to new partners," Chakrabarti said in a statement.

"With the NDB we share a vision not only of sustainable infrastructure but also of green energy, which ultimately benefits the global economy," he noted.

According to Kamath, the MoU formalises EBRD's partnership with the BRICS development bank.

"The EBRD has been working closely with the NDB during its establishment process. The NDB is striving to be closer to the needs of our members and to respond quickly and flexibly.

"We believe that in order to provide the best possible products and services to our members, partnerships with key national and global institutions are essential," he was quoted as saying in the statement.

The two multilateral banks agreed to maintain a continuous working relationship, including consultations on a senior level, exchange of information and potentially staff swaps.

UK-headquartered EBRD is a multilateral development bank set up in 1991 after the fall of the Berlin wall to foster the transition towards open market-oriented economies and to promote the private and entrepreneurial initiative in emerging Europe.

Since then, the Bank's region of operations has grown to include more than 35 countries, from Morocco to Mongolia and from Estonia to Egypt.

The New Development Bank was created in 2014 with an objective of financing infrastructure and sustainable development projects in Brazil, Russia, India, China and South Africa (BRICS) and other emerging economies and developing countries.

The Bank will complement the efforts of other financial institutions and establish a network of global, regional and local partnerships.

In 2016, the Board of Directors of the NDB approved seven investment projects in the areas of green and renewable energy and transportation for a total of over $1.5 billion.