“The BRICS built their own World Bank—and it’s lending in local currencies.” The New Development Bank (NDB), also known as the BRICS Bank, is a multilateral development institution established in 2015 by Brazil, Russia, India, China, and South Africa to finance infrastructure and sustainable development projects in member states and the broader Global South, with a particular emphasis on local currency lending and reduced Western conditionality.
Executive Summary
Headquartered in Shanghai with a regional office in Johannesburg and a subcontinental office in São Paulo, the NDB held an AAA/AA+ credit rating from major agencies as of 2025 and had approved over $35 billion in project financing across its membership. The bank has expanded beyond its founding BRICS members to include Bangladesh, Egypt, UAE, Uruguay, and Ethiopia, positioning itself as an inclusive development finance alternative. Its strategic differentiation from the World Bank and IMF rests on three pillars: local currency lending (reducing borrowing-country FX exposure), reduced governance conditionality, and non-interference in domestic political affairs—a feature deeply attractive to governments that resent IMF structural adjustment requirements.
The Strategic Mechanism
The NDB’s operational model differs from Bretton Woods institutions in four material ways:
- Local currency lending: The NDB has been a leader in local currency project finance, issuing bonds denominated in renminbi, rand, and rupee to fund projects without exposing borrowers to dollar exchange rate risk—directly addressing the original sin problem of EM sovereign borrowing.
- Governance structure: Unlike the IMF and World Bank, where voting shares reflect economic weight heavily favoring the U.S. and Europe, NDB founding members hold equal initial voting shares (20% each), with dilution provisions capped to protect founding member influence.
- Reduced conditionality: NDB loans do not attach macroeconomic reform conditions of the type associated with IMF programs, making the bank more attractive to sovereign borrowers resistant to external policy prescriptions.
- South-South orientation: Project approval processes are streamlined for member state infrastructure with a stated focus on climate-resilient and sustainable development projects—areas where the World Bank’s expanded climate mandates have also created procedural complexity.
Market & Policy Impact
- Dollar borrowing alternatives: As NDB local currency lending scales, it provides a structural alternative to dollar-denominated multilateral debt for sovereign borrowers—reducing one channel of dollar dependency in emerging market capital structures.
- Russia sanctions complication: Russia’s NDB membership created a governance crisis post-2022; the bank suspended new Russian transactions to protect its dollar funding access and credit ratings, demonstrating that the NDB cannot fully insulate itself from Western financial architecture even as a nominal alternative.
- China’s outsized influence: Despite equal voting shares, China’s capital commitments, infrastructure execution capability, and yuan lending dominance give Beijing disproportionate practical influence over NDB’s strategic direction.
- Competition with ADB and World Bank: The NDB directly competes with the Asian Development Bank and World Bank for project mandates in India, South Africa, and Southeast Asia—forcing traditional multilaterals to compete on speed, conditionality, and local currency terms.
- Credit market benchmark: NDB bond issuances—particularly in yuan and rand—are establishing non-dollar multilateral credit benchmarks that broaden the international capital market beyond dollar and euro denomination.
Modern Case Study: India’s NDB Borrowing Program, 2023–2025
India has been the NDB’s single largest borrower, using the bank to finance urban infrastructure, renewable energy, and climate adaptation projects across multiple states. By 2025, Indian NDB project approvals exceeded $8 billion, with a significant proportion denominated in Indian rupees—eliminating the currency mismatch risk associated with World Bank dollar loans for domestic infrastructure. Indian officials have publicly cited NDB’s faster approval timelines and absence of governance conditionality as key advantages over traditional multilaterals. The India case demonstrates the NDB’s core value proposition: for large emerging markets with credible development agendas, the bank offers capital on commercially competitive terms without the political friction of IMF/World Bank conditionality. It also illustrates the bank’s geopolitical significance—India’s active NDB engagement occurs simultaneously with its Quad membership and growing U.S. strategic alignment, demonstrating the multipolar logic of participating in multiple, competing financial architectures.