Can the BRICS Bank Really Deliver What the Global South Needs?

Is BRICS the saviour of the Global South? There appears to be optimism in the geopolitical and geoeconomic context as international financial and economic systems realign – seen, in particular, in the breaking away from Western-dominated transaction systems and the prospect of de-dollarisation. And for those seeking to realise multipolar ambitions, there is hope of a future Global South multilateralism.

The ‘middle powers’ subset, i.e. Brazil, India and South Africa, have advanced this last position at various historic junctures, across the institutional spaces of the UN system, the Bretton Woods Institutions (BWIs) and beyond. We can trace the present journey from IBSA Trilaterals building on alignments in WTO negotiations to BRICS – an acronym coined by a hedge fund economist to denote the rising economic heft of IBSA plus Russia and China as long-standing ‘friends’ of the Global South.

Through formal expansion from January 2024, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates joined as full members of BRICS, while Indonesia joined in January 2025 and ten partner countries – Belarus, Bolivia, Kazakhstan, Cuba, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan and Vietnam – entered in 2025.

The visibility of and interest in the bloc has risen sharply as military conflicts and energy crises have escalated in the world, as has the stark climate financing gap the countries of the Global South confront and the competition for critical minerals. (Though ‘critical’ for whom is certainly a question to ask regarding these minerals, whose end-use diversification is being linked to the rise of artificial intelligence and applications in the defence and armaments industry.)

Addressing these gaps in financing, competition over resources and priorities is critical as an adequate and inclusive response is needed, both for adverse weather events that leave vulnerable countries facing compounding disasters and for meeting the demands of development of these countries which, in parallel, face the overhang of a bigger, badder global debt crisis.

NDB ambitions

Let us turn, then, to the eleventh annual meeting of the New Development Bank (NDB) held in Moscow in May 2026. The chairman of the host government, the Russian Federation, presented the institution as “a pillar of the emerging financial system of the Global South” and “one of the key international financial organisations”.

NDB president Dilma Rousseff also declared that the new vision of “the bank will be larger, greener, more digital, more innovative, more agile and more cooperative” and that local currency financing will remain a strategic priority.

While Rousseff emphasised expansion of operations and membership towards strengthening the NDB’s institutional role as “a unified voice and platform for the Global South” and facilitating South-South cooperation and finding collective solutions to shared development challenges, Professor Jeffrey Sachs, in his address to NDB governors, pegged the relevance of the BRICS Bank (the unofficial name of NDB Bank) with the success of emerging markets and developing economies (EMDE).

His suggested expansions leaned towards partnerships with African countries, financing green/ digital technology stacks, sustainable urbanisation and alternative systems of payments and settlements. The spectrum was wide and the ambitions were high.

South perspective

But from the ‘South’ perspective, does the NDB really challenge the Washington Consensus or offer an alternative to a ‘Western’ or ‘Northern’ financial model? Within the developing world, civil society groups and state actors have already been challenging the dominant international financial institutions and multilateral development banks, from the World Bank Group to the Asian Development Bank (ADB).

Techno-solutions, shrinking of concessional lending across the development and climate finance portfolio, long-standing issues around accountability, transparency and participation, as well as violations of human rights (coupled with the deregulation of environmental and social policies) and preference for using public funds to leverage private finance are part of well-documented critiques.

It has been pointed out that the financing model propagated by international financial institutions, accompanied by structural adjustment conditionalities given the reliance on the dollar (following the collapse of the gold standard), has created foreign exchange traps and resurgent debt crises in developing countries.

They have pointed to the burden of public and multilateral debt owed to private sector creditors, which has so far not been addressed by international debt-management mechanisms. The IMF itself has raised the alarm about the proportion of private financing as the debt crisis resurges in many countries.

There are now demands for an alternative financing model to the dollar and the international payment system routed through the West  that includes local currency lending and settlements. This follows some BRICS countries themselves facing sanctions as well as a wider search for a way to escape or counter the debt and foreign exchange trap. Another key expectation is to bridge the financing gap in development and climate without conditionalities that circumscribe the policy sovereignty of the borrowing countries.

BRICS Bank: Can it reduce indebtedness?

The prioritisation and extension of local currency lending potentially provides a counter and a key advantage in the face of the dollar and debt problematic. As of December 2022, the NDB project portfolio by currency has been dominated by the US dollar (at approximately 20 billion), followed by Renminbi (upwards of 5 billion), with the Euro trailing (at approximately 3 billion). It would then be interesting to track the operationalisation and scale of impact of diversified currency financing.

The scale and reach of financing as yet is small and limited to a few countries. The official information (as of the first quarter of 2026) is that the NDB has approved $42.9 billion in financing for 140 projects across sectors such as clean energy, transport, water and sanitation, environmental protection, social and digital infrastructure, forming about a sixth of the commitments of the World Bank Group and leading Multilateral Development Banks in 2025, going by various official institutional and news sources.

Whether the NDB can avoid debt creation, however, is debatable. It has the purpose of mobilising resources for infrastructure and sustainable development projects in EMDCs, mandated in the NDB Articles of Agreement (the 2022-2026 strategy mentions climate goals). Like all banks, this mobilisation looks to private capital as well as expanding financial instruments, bonds, co-financing and plays to the key rating agencies.

In April 2025, the outstanding market borrowings of the NDB stood at $21.51 billion, across international and national (China, South Africa, Russian Federation) exchanges/bond markets.

The evolving proportion of paid-up and mobilised capital, repayment terms and practices as further loans are disbursed and mature remain a matter for attention going ahead.

Also debatable is whether the NDB can meet the energy transition and resilience needs of Least Developed Countries and climate-vulnerable groupings such as the Small Island Developing States, and, in fact, whether it is designed to bridge the concessional finance gap or provide grants at a time when the loan-based structure of climate finance is clearly unable to serve the needs of climate vulnerable countries. Further, while climate finance is taken up as a priority, what defines climate action under project criteria is not clear.

Limited lending base, unclear safeguards

Scholars monitoring the institution point out that, for the moment, the NDB has a limited base of lending and borrowing, issues around transparency and pertaining to environmental and social safeguards. The extent to which the governance and membership of BRICS and the NDB influences development priorities and choices – including through selection criteria for projects and in the absence of stakeholder engagement mechanisms – is also unclear.

There appears to be barriers to accessing the NDB, indicating a need to update the decision-making structures to maintain strong safeguards, transparency and accountability, apart from increasing financing capacity.

As BRICS expands, its membership does not automatically overlap with NDB membership. In the latter, the founding members since 2015 – Brazil, Russia, India, China and South Africa – have since been joined by new members between 2021 and 2026: Bangladesh (not a member of BRICS), the UAE, Egypt, Algeria and Uzbekistan (a BRICS partner country since 2025). And there are also prospective members: Uruguay, Colombia, Ethiopia (the only BRICS member in this segment), Angola and Zimbabwe (admitted by the Board of Governors, but yet to deposit their instruments of accession). Indonesia’s BRICS membership and decision to join the NDB with capital commitment also made news in these times of volatile, energy-centred geoeconomics.

Shareholding is equally apportioned for the five founding members (18.72% of the total, with subscribed capital amount $10 billion for each), with percentage of shareholding/capital subscription of approximately 2.2% or below for new members that have joined recently.

According to the Articles of Agreement, the voting power of each member shall be equal to the number of subscribed shares in NDB capital stock (the foundations of weighted voting?), with some decisions made by simple, qualified or special majority, as provided by the Agreement. Governors are entitled to cast votes of the member country represented and directors the number of votes counted towards their election.

A 2016 version of the environmental and social framework is available on the official NDB website. It is aimed at managing social and environmental risks and impacts in operations, projects and the reputation of NDB and its stakeholders. The conduct of environmental and social impact assessments, developing management plans, information and engagement for project affected stakeholders, monitoring environmental and social performance to ensure compliance and reporting to the NDB and establishing or maintaining a fair grievance redressal mechanism for these safeguards – these are entirely the responsibility of the client.

The NDB reserves for itself the role of project screening and categorisation (signifying the extent of adverse impact) and due diligence based on client reporting. While mandatory requirements with reference to environment, involuntary resettlement and indigenous peoples under Environmental and Social Standards, coverage is governed by country-specific international agreements. It can also be highlighted that any explicit policy or framework on gender (or indeed any reference or provision under sustainability or safeguards frameworks) is conspicuous by its absence.

The balancing of commitments to multilateralism and UN principles, promises being made to the Global South and interests and political will of the BRICS countries and NDB members in the career and offerings of the BRICS Bank is certainly worth being assessed from different vantage points, by both the optimists and cynics.

Anusha Lall is a researcher with the Focus on the Global South.

This article is part of a series on BRICS and Global South cooperation curated by The Wire and the Centre for Financial Accountability (CFA). Read part one here, part two here, part three here and part four here.

This article was originally published in The Wire you can read it here.