Newbankontheblock

BRICS New Development Bank operates as a multilateral development financial institution to help emerging economies

THE roofs at the Shanghai Lingang Industrial Area are now serving a more productive purpose than simply covering factories and warehouses. In August, the vast area in southeast Shanghai had solar panels installed on all roofs, capable of generating power for local businesses and surrounding households.

The inaugural project of the new energy demonstration program that is expected to be expanded to more areas was funded in 2016 by the first lending program of the New Development Bank (NDB), an international multilateral financial institution cofounded by BRICS countries.

“The rooftop photovoltaic power stations with a capacity of 100 kw will reduce annual carbon dioxide emissions by 88,360 tons,” said Wang Tai, Deputy General Manager of Shanghai Hongbo New Energy Development Ltd., borrower of the NDB’S first Chinese loan and contractor of the new energy utilization project.

This is just one of the sustainable development and green infrastructure programs funded and supported by the NDB. Since it came into operation in July 2015, the NDB has approved seven loans to member nations for green energy development. It is offering a developing country alternative to global development finance, according to observers. green energy high up on its development agenda. Loans granted by the NDB in 2016 include one given to Eskom, South Africa’s largest power supplier that generates nearly 95 percent of the electricity used in the country and 45 percent of that used in Africa. The $180-million loan will assist renewable energy projects and is expected to reduce carbon dioxide emissions by 2 million tons, according to the bank.

In fact, to optimize its power portfolio, South Africa introduced the Integrated Resource Plan in 2010 and pledged to add 10,000 mw of renewable energy capacity over the next 20 years. A major reduction, to around 46 percent of capacity by 2030, in reliance on coal as the main source of electricity will be realized due to the introduction of sustainable capacity from renewable sources.

“This financial institution cofounded by emerging economies aims to assist member countries to thrive in a sustainable path rather than achieve GDP growth at the cost of polluting the environment,” said Zhan Shu, a senior advisor with the NDB.