Engagement between the New Development Bank and Other Development Banks: A formal basis for future cooperation

Since its establishment, the New Development Bank (NDB) has been actively seeking to establish cooperation with other multilateral financial institutions. This strategy was stimulated by the fact that projects funded by multilateral banks often require large-scale investments and significant expert resources, or are associated with risks that a single lender cannot undertake independently. The purpose of this article is to study the mechanisms of cooperation between the NDB and "traditional" multilateral banks, as well as the national development banks of the BRICS grouping of Brazil, Russia, India, China and South Africa. This article seeks to forecast the future of cooperation in order to better understand the overall prospects of the NDB. To do so, existing formats of engagement between the NDB and other development banks are analyzed, as are their approaches to participation in joint projects. The article finds that the NDB, despite its differences from the "traditional" banks, seeks to establish an effective division of labour and cooperation with them, primarily because of their common goal of reducing the large-scale deficit in infrastructure investments. Despite the fact that none of the projects approved by the NDB so far involves other multilateral development banks, the launch of official cofinancing with them is expected in the very near future. Depending on the scenarios of NDB expansion, its joint loan portfolio with other multilateral banks in five years could reach $58 to $82 billion. As for national development banks of the BRICS, the NDB has also laid a formal framework for cooperation with them, even while it has not yet resulted in any concrete projects. Thus, in order to successfully implement its strategy of engagement with other financial institutions in the future, the NDB needs to intensify practical cooperation with national banks in the areas identified in the relevant declarative documents. © HSE, 1993-2018.