BRICS Development Bank in Talks with Saudi Arabia, Seeking More Funding Options
The New Development Bank (NDB), created by the BRICS nations (Brazil, Russia, India, China, and South Africa), is engaging in discussions with Saudi Arabia to potentially welcome the country as a member. This news comes as the NDB seeks to expand its funding sources due to sanctions imposed on Russia, one of its founding shareholders.
If Saudi Arabia joins, it would strengthen its ties with the major developing economies of the world while providing the “BRICS bank” access to funds from the second-largest oil producer globally.
The NDB has been concerned about its reliance on Russia, which holds a 19% stake. Last year, Fitch downgraded the bank’s credit rating, citing “reputational risk” and potential limitations in accessing the U.S. dollar bond market. As a result, the NDB suspended funding new Russian projects and put its Russia exposure on hold.
Fundraising is now a top priority for the NDB, as it aims to mobilize resources and explore alternative instruments and currencies. Since its inception, the bank has lent approximately $33 billion to nearly 100 development projects and has already admitted the United Arab Emirates, Egypt, and Bangladesh as members.
The NDB’s annual meeting, starting soon, will provide an opportunity to evaluate options for attracting funding and strengthening its position in the global financial landscape.
Clever Robot News Desk 30th May 2023