Green investment to be major growth driver for China, New Development Bank VP says
Source: Xinhua Editor: huaxia / Chen Junxia and Martina Fuchs 2022-05-07 21:19:00
Green investment and sustainability will be major growth drivers for China in the future, said Vice President and Chief Financial Officer of the New Development Bank (NDB) Leslie Maasdorp on Friday.
"Most of the world suffered during the last two years as a consequence of the successive lockdowns and COVID. China has done extremely well in 2020 and 2021 to recover from that crisis," Maasdorp told Xinhua at the 51st St. Gallen Symposium in Switzerland, a student initiative aiming to foster cross-generational dialogue that took place on May 5-6.
"I think 2022 is likely going to be very, very challenging," said the NDB VP, adding that while China is going through major adjustments and rebalancing, he thought "there are strong economic drivers that will propel China's economy forward and the commitment to green and sustainability is a key area."
"There are new industries being developed in China that will propel the next phase of its growth story," he also said.
According to the NDB's general strategy, sustainable infrastructure development is at the core of its operational strategy which is AA+ rated by S&P and Fitch.
Maasdorp also pointed to the strong demand for infrastructure projects around the world, especially in emerging markets.
The NDB, headquartered in Shanghai, is a lender established by the BRICS group of emerging nations (Brazil, Russia, India, China and South Africa) in 2015. It aims to become a global development bank to mobilize resources for infrastructure and sustainable development.
"The bank is now rapidly becoming an emerging-markets anchored global institution," said the executive, adding this year and next it will continue to expand because "there is a massive need for sustainable infrastructure finance."
"As a result of COVID, a lot of governments are fiscally constrained, they do not have the resources to build new infrastructure, new power, new ports, new rail infrastructure and so on, and that is where the bank plays a critical role," he said.
"In Central Asia and South Asia we see strong interest in new finance on the sustainable front because many of these countries need to green their economies and that is one of our specialties. We're helping countries to move towards the green economy as we all battle with the transition towards net zero," the executive said.
Since its establishment, the NDB has approved more than 80 projects for its members, with a total portfolio of 33 billion U.S. dollars.
The projects cover sectors including transport, water and sanitation, clean energy, digital infrastructure, social infrastructure and urban development.
"The bank has a 50-billion-dollar subscribed capital base. Ten billion dollars of that is equity money we received from the countries and our plan now is to expand over the next number of years to reach a capital base of 100 billion dollars," Maasdorp said.
"We will do that by expansion, bringing in new countries, both developed countries as well as developing countries. When countries join, they put in fresh capital into the bank and we use that money to leverage and raise more money through the debt capital markets," he said.
He added that the bank aims to raise new climate funds as part of their commitment to the fight climate change.
The NDB, prioritizing its expansion, has admitted four new members in 2021: Bangladesh, Egypt, the United Arab Emirates (UAE) and Uruguay.
