A new US$50 billion development bank jointly formed by the so-called BRICS nations could offer solar a vital new source of funding, according to a leading expert.

Last week Brazil, Russia, India, China and South Africa (BRICS) confirmed they had joined economic forces to form the joint-nation New Development Bank.

The new institution will fund infrastructure and sustainable development projects in BRICS and other developing economies.

Talking to PV Tech, Stephany Griffith-Jones, finance professor at Columbia University and author of a BRICS development bank discussion paper in March for the United Nations, said the BRICS nations had identified solar as one of their priorities.

Although actual BRICS funding and projects will “take a little bit of time” to materialise, the NDB “is very exciting” for solar development and would “make [solar projects] more feasible”, said Griffith-Jones.

Griffiths-Jones said that with the NBD based in Shanghai and China enjoying a leading role in the global solar industry, China would have a leading role in pushing for solar through the NDB.

Each of the NBD member countries will input an equal US$10 billion to create an initial fund of US$50 billion, scaling up to US$100 billion – with a core focus on renewable energy development.

On meeting rural electrification goals with solar – mainly India’s prime minister, Narendra Modi’s pledge to give all citizens light, Professor Griffith-Jones said the NBD could be used as “a mechanism to fund that”.

“[India] still has a lot of people without electricity, as does Africa, I think it will be a priority for the BRICS development bank, expanding access to clean water and energy, and solar would be a very good way of doing that,” said Professor Griffith-Jones.

However, Griffith-Jones said Russia was “a little bit the odd man out” as it is not really an ‘emerging’ or ‘developing’ country”. As Russia is an oil and natural gas exporter, “they may be less interested [in renewables]”, she added.

The BRICS statement said “bearing in mind that fossil fuel remains one of the major sources of energy” BRICS believes renewable energy can “create new economic growth, reduce energy costs and increase the efficiency in the use of natural resources.”

One concern that has been expressed in relation to the NDB is the possibility of rivalries with other development banks, such as the World Bank.

But Professor Griffith-Jones said the new institution should “encourage others like the World Bank to do more [in backing solar projects”.

President of Brazil’s Ideal Institute, a private non-profit group promoting renewable energy in Brazil, Mauro Passos told PV Tech that the NBD’s explicit prioritisation of renewable energies “shows its difference [to other development banks] with its commitment to cleaner energy”.

Passos said he did not think there would be any difficulties between NBD and other development banks “because they all have the same objective: promote development”.

According to initial estimates at Columbia University, Professor Griffith-Jones said in June that the US$100 billion NBD fund’s level of annual lending could reach, after 20 years, loans of up to US$350 billion, or US$34 billion annually – which could be used for investment projects worth US$68 billion annually (with private/public co finance) – “this would be far bigger than the World Bank loans”.   

The BRICS leaders’ statement also acknowledged that climate change “is one of the greatest challenges facing humankind”.