Main Points:
- Xi Jinping’s Endorsement: Chinese President Xi Jinping lauded the NDB’s role in empowering emerging economies and pledged continued support for its expansion.
- Global South Leadership: The NDB is positioned as a symbol of Global South cooperation, advancing infrastructure, clean energy, and sustainable development.
- Rapid Project Approval: As of April 2025, the NDB has approved 120 projects across sectors such as transport, water management, and social infrastructure.
- Strong Credit Ratings: The bank maintains an AA+/A-1+ rating with a stable outlook from S&P and Fitch.
- China’s Broader Support: Beyond the NDB, China announced nearly $10 billion in new yuan-denominated credit lines to Latin America and the Caribbean, enhancing its economic footprint in the Global South.
Introduction
In late April 2025, Chinese President Xi Jinping paid a landmark visit to the New Development Bank (NDB) headquarters in Shanghai. Established by the BRICS nations—Brazil, Russia, India, China, and South Africa—the NDB has swiftly become an influential multilateral development bank dedicated to financing infrastructure, clean energy, and urban development in emerging economies. During a high-profile meeting with NDB President Dilma Rousseff, Xi underscored the bank’s pivotal role as a “pioneering initiative for the unity and self-improvement of the Global South.” He urged the institution to remain true to its founding mission and to continue providing “high-quality, low-cost, and sustainable” financing tailored to the needs of developing countries.
Xi Jinping’s Endorsement of the NDB
President Xi’s speech at the NDB headquarters reflected China’s broader geopolitical strategy to amplify the influence of the Global South in the international financial system. He praised the bank as “a shining example of Global South collaboration,” stressing that only by strengthening institutions led by emerging economies could the world forge a more balanced and inclusive governance framework. Xi’s endorsement also came amid growing calls from developing nations for greater representation in global financial reforms and for safeguarding their rights and modernization efforts.
In parallel with his NDB visit, Xi announced at the China–CELAC Forum a $10 billion yuan-denominated credit line to Latin American and Caribbean countries, along with visa-free travel policies for select nations. These measures are designed to deepen diplomatic ties and promote China’s currency internationally, as trade between China and Latin America surpassed $515 billion in 2024—up from just $12 billion in 2000.
The NDB as a Symbol of Global South Cooperation
Since its inception in 2015, the NDB has distinguished itself by emphasizing Global South priorities. Unlike traditional development banks, which are often dominated by Western powers, the NDB fosters a sense of ownership among emerging economies. Xi highlighted this unique positioning, calling on the bank to “closely follow the development needs of the Global South” and to support projects that enhance both economic growth and social welfare.
The bank’s leadership under Dilma Rousseff has steered it towards a diversified portfolio, balancing large-scale sovereign loans—such as regional rapid transit systems in India—with non-sovereign financing for private-sector initiatives, exemplified by its first non-sovereign loan to City Bank PLC in Bangladesh .
Rapid Growth and Project Pipeline
As of April 2025, the NDB’s Board of Directors has approved 120 projects spanning multiple sectors:
- Transport Infrastructure: Regional rapid transit systems in India.
- Clean Energy: Solar and wind installations across BRICS and partner countries.
- Water and Sanitation: Urban water management in Brazil and South Africa.
- Social Infrastructure: Affordable housing and healthcare facilities in India and Bangladesh.
Among recent approvals are:
- Piramal Finance Affordable Housing (India): A non-sovereign loan aimed at increasing access to low-cost housing in urban centers.
- City Bank Sustainable Infrastructure (Bangladesh): A $25 million line of credit co-financed with the Asian Infrastructure Investment Bank to bolster Bangladesh’s sustainable development sector.
This robust pipeline underscores the NDB’s commitment to addressing critical infrastructure gaps while promoting environmentally sustainable solutions.
Solid Financial Standing and Credit Ratings
A key factor underpinning the NDB’s success is its strong creditworthiness. On May 10, 2024, S&P Global affirmed the bank’s AA+/A-1+ long- and short-term foreign currency issuer credit ratings with a stable outlook. Fitch Ratings similarly affirmed an AA long-term issuer default rating and F1+ short-term rating on May 9, 2025. These ratings reflect:
- Excellent Capitalization: A robust callable and paid-in capital structure shared equally among BRICS members.
- Prudent Risk Management: Self-imposed metrics ensuring high-quality loan portfolios and liquidity buffers.
- Strong Shareholder Support: Backing from the five founding countries, which provides an implicit sovereign guarantee.
Such credit ratings enable the NDB to borrow at competitive rates, thereby passing on lower financing costs to member countries.
Recent Developments and Geopolitical Context
Beyond its core project financing, the NDB is increasingly intertwined with China’s broader Belt and Road Initiative (BRI). For instance, Colombia’s recent accession to the BRI included a pledge of 66 billion yuan for infrastructure, clean energy, and AI projects—showcasing the synergy between BRI and NDB financing.
Simultaneously, China’s strategic push into Latin America—marked by new credit lines and diplomatic outreach—reflects a competitive dynamic with the United States. As developing nations seek diversified funding sources, the NDB’s rising profile positions it as a viable alternative to traditional institutions like the World Bank, whose recently approved projects have drawn criticism for longer approval cycles and conditionalities.
Challenges and Future Opportunities
Despite its rapid ascent, the NDB faces several challenges:
- Member Diversity: As it considers expanding membership beyond BRICS (e.g., Egypt, Bangladesh), it must balance governance rights with operational efficiency.
- Project Execution: Ensuring on-time and on-budget delivery in countries with varying regulatory environments.
- Environmental and Social Safeguards: Upholding high standards to avoid the pitfalls of “debt-trap diplomacy” criticisms.
Looking ahead, the bank’s second “golden decade” focuses on leveraging digital finance, green infrastructure, and public-private partnerships to amplify impact. Enhanced collaboration with organizations like the Asian Infrastructure Investment Bank and the Inter-American Development Bank may also open new co-financing avenues.
Conclusion
President Xi Jinping’s public backing of the New Development Bank signals China’s intent to solidify the bank’s status as a cornerstone of Global South economic empowerment. With an expanding project portfolio, strong credit ratings, and a growing role in initiatives like the Belt and Road, the NDB is poised to shape the future of infrastructure and sustainable development across emerging markets. As it navigates governance complexities and competitive geopolitical landscapes, its success will hinge on maintaining fiscal prudence, upholding social and environmental standards, and fostering true ownership among its member nations.
