BRICS bank to finance energy projects from next year

The new BRICS bank would become fully operational from next year as emerging markets attempt to challenge the Western-dominated multilateral lenders like the International Monetary Fund and the World Bank.

Speaking at the BRICS summit at Ufa on Thursday, Russian President Vladimir Putin said that the New Development Bank, with an estimated capital of $100 billion (90 billion euros), will start financing energy projects from next year.

The new bank is specially important for Russia, which has suffered huge currency fluctuations amidst western sanctions in the wake of the crisis in Uklraine. The country also failed to attract investors  and sees the bank and the currency reserve pool as an alternative the IMF and World Bank that are dominated by the United States.

While the bank and the $100-billion pool of currency reserves are crucial to their efforts to undermine Western hegemony, BRICS emphasized it is not an alternative or a rival to the United Nations institutions.

Senior bankers from Russia and India said the New Development Bank, which held its inaugural meeting before the BRICS summit, would continue to expand, but would not position itself as a rival to existing multilateral lending institutions.

The BRICS nations - Brazil, Russia, India, China and South Africa - which represent 40 per cent of the world's population, agreed in 2013 to establish their own development bank (See: World Bank ready to work in tandem with proposed BRICS bank).