The launch of the Brics New Development Bank will change global development finance, said Eskom’s Brian Molefe on Thursday. “They will talk about global development finance before and after Ufa,” claims Mr Molefe.
Is this True or False?
Before you answer, recall that his South Africa power utility desperately needs funding. As the acting CEO of South Africa’s power utility, he wants to be both an organizer and a client of the new bank. That is not the person one asks for an independent due diligence opinion.
The BRICS are Brazil, Russia, India, China, and South Africa. The New Development Bank, launched during the Ufa Russia 2015 Brics/SCO (Shanghai Co-operation Organisation) Summit on Tuesday, would be based in Beijing.
The new group may succeed. But they face hurdles. For starters, the member nations do not yet have standard streamlined visa processes in place among them. And all are a bit tight on capital . Each has some dependency upon the World Bank for loans.
The sponsors say they expect the new bank to fund riskier projects.
So is this real, or is this a game plan for questionable geo-political leverage investments?
A bit of due diligence might be a good idea.