After commencing operations in 2015, the New Development Bank’s first capital market transaction was a green bond issued in the Chinese interbank market in July 2016, demonstrating an institutional commitment to building sustainable infrastructure that sets it apart from traditional development finance (Chin, 2024). Now, almost a decade later, it is increasingly significant how that ideal has evolved in global climate finance.
In 2022, global climate finance reached about $1.46 trillion, far short of the $7–8 trillion needed annually by 2030 for Paris Agreement goals (Climate Policy Initiative, 2024). This gap creates a major financing challenge, especially for developing countries, balancing growth with climate actions. BRICS nations have responded by developing financing mechanisms that emphasise local-currency operations and South-South cooperation.
The NDB’s Evolving Model
Unlike institutions that prioritise hard currency lending to protect credit ratings, the NDB embraced local currency financing from the start as both a development philosophy and a financial sustainability strategy (Chin, 2024). By 2025, NDB President Dilma Rousseff confirmed that roughly a quarter of NDB lending has been denominated in local currencies, with stated ambitions to increase this share further over the current strategic period. The rationale is simply that renewable energy infrastructure generates local currency revenue over decades, so lending in that same currency eliminates exchange rate risk for borrowers (World Resources Institute, 2025).
Back in November 2024, the NDB issued a $1.25 billion green bond which attracted orders worth more than $2.2 billion from Asia and EMEA investors (New Development Bank, 2024). At the moment, the bank has a 5-year strategic plan wherein 40% of the funding is earmarked for renewables and sustainable development. This number shows an increase in the absolute volume of financing, even though the relative percentage has gone down from the 60% target of the previous cycle.
Brazil’s 2025 Presidency and Forest Finance
Brazil’s dual role as BRICS President and COP30 host gave it unusual leverage to push climate finance commitments forward. The July 2025 Leaders’ Framework Declaration marked one of the most comprehensive BRICS efforts to coordinate climate finance by covering multilateral bank reforms, finance mobilisation, private capital engagement, and regulatory improvements to help financial flows reach developing countries (BRICS Brasil, 2025a).
The Tropical Forests Forever Facility emerged as its most innovative piece. Environment Minister Marina Silva said the TFFF fills a gap no current system has: dedicated and large-scale finance for forest conservation (BRICS Brasil, 2025b). It wants to move big performance based funds to nations cutting deforestation, including help for indigenous groups and local communities, though exact thresholds and funding rules are still under discussion (COP30, 2025a). This tackles a long-standing economic problem: historically, clearing forests has been more profitable than protecting them, even when the climate costs of doing so are enormous.
By the time COP30 concluded in November 2025, the TFFF had attracted several billion dollars in announced pledges, although many remain non-binding and subject to further negotiation (COP30, 2025b).
Structural Complexities and Opportunities
The recent expansion of BRICS to include several new members has introduced more diverse energy profiles and fiscal conditions within the bloc. Several economies remain heavily dependent on fossil fuels, which creates a real structural tension when the bloc is trying to lead on net-zero transitions. Managing that diversity without losing political cohesion on climate issues will be one of the hardest tests ahead.
The NDB’s cumulative project approvals remain modest compared to the World Bank Group or the Asian Development Bank, which aligns with its intended role as a complement to existing institutions. The NDB has demonstrated ambition in local currency operations and green bonds. However, traditional multilateral development banks continue to have greater influence in research and policy (Chin, 2024).
The rotating presidency structure presents a significant vulnerability. Brazil’s commitments in 2025 will require India’s 2026 presidency to continue their implementation rather than begin new initiatives. Achieving effective climate finance requires sustained effort that cannot be reset each year.
The Path Forward
South-South coordination is significant as it increases the pool of available resources and strengthens the collective influence of developing countries. Representing nearly half of the global population and over 40% of global GDP (measured at purchasing power parity), BRICS possesses substantial economic influence. The New Development Bank (NDB) is positioned to facilitate BRICS engagement throughout the Global South, and recent initiatives indicate a more strategic approach to renewable energy investment and technology cooperation (World Resources Institute, 2025).
An often overlooked aspect is peer learning. Countries that have managed clean energy transitions under significant fiscal constraints possess valuable knowledge for others undertaking similar efforts. The BRICS Framework Declaration identifies national development banks as the most critical actors, as they are closely aligned with national policies, possess local expertise, and are able to lend in local currencies (BRICS Brasil, 2025a).
The bloc does not seek to create an alternative to the Paris Agreement, but instead aims to enhance the framework’s effectiveness for countries that have contributed minimally to climate change yet face the greatest risks. BRICS leaders have urged developed countries to fulfil their UNFCCC and Paris Agreement commitments, including scaling up climate finance to potentially hundreds of billions of dollars annually by the 2030s for developing countries and meeting the previous $100 billion pledge, which has only been partially fulfilled after delays and ongoing shortfalls (BRICS Brasil, 2025a; UNFCCC, 2016).
India’s approach to Brazil’s legacy in 2026 will be indicative of whether the BRICS climate finance architecture is evolving or merely rotating through presidencies. The institutional foundations are more robust than they were five years ago. Although progress remains gradual, the commitment is sufficiently substantive to warrant continued attention.
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