For much of the past four decades development finance followed a predictable script. Countries seeking capital whether to build power plants, expand transport corridors or stabilise fragile currencies turned largely to Western-led lenders such as the World Bank, the International Monetary Fund and private markets anchored to the U.S. dollar.
Access to that capital usually came with conditions. Fiscal reforms, governance requirements and financial systems closely tied to dollar clearing networks formed the institutional backbone of global development lending.
That architecture is now facing a gradual challenge. While geopolitical attention has focused on wars, sanctions and disruptions in shipping and insurance, a quieter transformation is unfolding within the financial institutions of the emerging world. The New Development Bank created by the BRICS countries in 2015 is gradually evolving into a growing source of liquidity for developing economies.
The NDB remains far smaller than the World Bank or the Asian Development Bank. Yet its trajectory has begun attracting attention. In 2024 the bank approved roughly $4.5bn in new lending more than double the volume recorded the previous year.
Since its creation cumulative project approvals have surpassed $43bn across more than 140 operations. Earlier lending focused primarily on traditional infrastructure roads, power systems and transport corridors. More recent approvals increasingly emphasise resilience including renewable energy systems, water management networks and digital infrastructure.
Perhaps the most consequential development is not the scale of lending but the currency in which it is issued. Development finance has historically been denominated largely in dollars, exposing borrowers to exchange-rate risk when local currencies weaken.
The New Development Bank has begun experimenting with an alternative approach. A growing share of loans are issued directly in local currencies including Chinese yuan, Indian rupees and South African rand. By doing so the bank reduces the mismatch between project revenues and debt obligations.
Policymakers within the BRICS framework have begun discussing ways to link infrastructure finance with broader systems of sovereign insurance and alternative payment networks.
If these initiatives take shape infrastructure financed by NDB loans could eventually operate within a partially self-contained financial ecosystem from project funding to settlement mechanisms.
This architecture would not replace the existing global financial system. But it would create a parallel channel through which trade and investment could increasingly flow across the Global South.