Bangladesh is getting membership to the New Development Bank (NDB) – a multilateral development bank established by BRICS states in 2015.
Finance Minister AHM Mustafa Kamal discussed the issue at a virtual meeting with the bank's President Marcos Prado Troyjo, Tuesday. According to the finance ministry, the bank president assured Bangladesh it is considering the membership proposal.
The bank was established in July 2015 with five core members – Brazil, Russia, India, China, and South Africa (BRICS) – with $100 billion of initial authorised capital.
In 2014, Bangladesh proposed to the BRICS to become a founding member of the bank. The bank is now considering the membership of 15 countries, including Bangladesh.
While talking to the bank's president, the finance minister said, "Bangladesh has the capacity to meet all the terms required to become a member. Therefore, we are hopeful about getting the membership soon."
Finance ministry officials said the chances of getting foreign loans on easy terms will decrease after Bangladesh's graduation to a developing country in 2026. Moreover, the bank could be a new funding source to: implement the 8th Five Year Plan, attain the Sustainable Development Goals (SDGs) and Vision 2041, implement the Delta Plan, and cope with the pandemic-led challenges.
According to the 8th Five Year Plan, external borrowing requires $12 billion, on average, per annum. Another $9.46 billion per annum will be required to implement the SDGs.
The total spending on delta-related interventions and projects requires 2.5% of gross domestic product per annum by 2030. The investment plan of the Bangladesh Delta Plan 2100, prepared by the World Bank, consists of 80 projects, and its investment cost is $37 billion until 2030. The current mobilisation trend of foreign resources ranges from $7 to $8 billion per annum.
This outlook shows that there is an enormous financing gap.
To address all these upcoming challenges and implement these development agendas, Bangladesh will require a new investment commitment.
The NDB could be a good financing option to access resources for materialising the mega-physical and social infrastructure projects.
At present, the lending rate of NDB seems a little bit flexible and less costly. If the London Inter-Bank Offered Rate rate increases in the future, the loan might be higher and non-concessional.
In 2016, the bank distributed around $1.5 billion in infrastructure and sustainable development projects in the BRICS. In 2018, the bank approved 17 projects worth $4.7 billion.
The number of projects approved in 2019 stands at 22 with $7.2 billion. The NDB has cumulatively approved 72 projects worth $25.7 billion.