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President of the BRICS New Development Bank Kundapur Vaman Kamath comments on plans for co-financing projects, issuing bonds in Russia and expectations for the China's Presidency at BRICS
- It is well known that the NDB is planning to expand its project pipeline. Have you recently received new applications for the Bank's financing from Russia and other members of the NDB?
- Last year we did projects with a total value of over USD 1.5 bln. This year we expect to do projects with a value of between USD 2.5 bln to USD 3 bln. This will be spread over all our member countries.
As far Russia is concerned, I think, we are in an advanced stage of talks on their submitting two or three projects. It would not be proper for me to say which ones until we actually receive them.
- Could you tell us more about the Bank's plans for co-financing projects with other multilateral development banks?
We have started the process of signing memoranda of understanding with other multilateral development banks (MDBs), who have in the past been co-financing with other MDBs. Having said that, our initial focus is going to be doing projects ourselves and the reason is that this will allow us to learn and improve our own skills.
Selectively, we will look at co-financing, but that is not going to be a significant part of our business. Areas that we will co-finance will be all of our areas of operations, which are of importance to us. Our focus is infrastructure and sustainable development. Across this, every project is something we look at if it is presented to us.
- Is the NDB discussing the possibility of co-financing projects with Vneshekonombank (VEB)? Could you share any plans related to the Bank's cooperation with it?
At this stage, we have not opened a dialog with any of the national development banks or commercial banks in the context of co-financing. So, we hope that maybe towards the end of this year, we will open a dialogue to understand what we can do with national banks or international banks.
- The NDB has received AAA ratings from two Chinese rating agencies. Could you share the possible time frame for a receiving a rating from international agencies?
I think we will approach the international rating agencies most likely during the second quarter of 2017. And once the process is completed, we can take the next steps.
I think at this stage we are looking at all the three leading global rating agencies, because we will need an international rating for several capital raising initiatives that we are working on. So, we will need to complete this in a rather quick time.
- Previously you said that the Bank is looking at issuing bonds in Russia. Could you tell us more about these plans? Are you aiming at a certain date or a period?
We indeed have plans to access local markets in all our member countries and that will include Russia also. As we understand it, access to the market would possibly require an international rating. If we can access a market with a local rating, than we will certainly explore it.
I think, by June-July we should be firming up our plans to access local currency markets, including Russia.
- Russia is planning to issue bonds nominated in RMB. Could the NDB consider purchasing such bonds when they will be issued?
- Our focus primarily is on lending for infrastructure and sustainable development, so any bond purchases of any country or any institution will have to be as part of Treasury operations. So, depending on Treasury's needs, we will look at all options available to us.
- Could you share your expectations for the China's Presidency at BRICS?
- I've seen the last two years - Russia's Presidency and India's Presidency - and China's Presidency now. From the NDB's perspective, we look at these as carrying forward the objectives that were in mind when the BRICS nations decided to set up the NDB. Each of the countries, I think, has in their own way, carried the task forward and I would expect that that would continue under the Chinese Presidency.
Indeed, I must say that China expects us to play a role in the forthcoming BRICS Summit, and work on several things around that Summit, so we would be honored to do that.