ga_th1_pb-prinsloo_20170831-1-e797fd35b7bc6600.pdf

This policy brief analyzes the New Development Bank's (NDB) approach to the Use of Country Systems (UCS) for infrastructure financing. It examines how the NDB leverages the public financial management (PFM) and environmental and social frameworks (ESFs) of member states to increase efficiency, while providing recommendations to mitigate financial and reputational risks as the bank expands its membership.

• The New Development Bank (NDB) prioritizes the use of country systems (UCS) to increase the efficiency of development finance, placing nation states at the center of its engagements and favoring the use of existing client systems for both sovereign and non-sovereign borrowers.
• The NDB's procurement framework relies on broad principles—economy, efficiency, value for money, fit for purpose, competition, and transparency—rather than strict criteria, and encourages procuring goods and services domestically before looking to other member countries.
• The NDB's Environmental and Social Framework (ESF) delegates several responsibilities to borrowers, including impact studies and grievance mechanisms, while the bank retains roles in screening, due diligence, and monitoring. However, civil society organizations have criticized the ESF for lacking clear definitions of 'strong' country systems and inadequate gender integration.
• As the NDB expands its membership, it faces risks including unfamiliarity with new member states, potential lack of commitment to the UCS agenda from new members, and capacity constraints due to its 'lean' organizational structure.
• To mitigate financial and reputational risks associated with UCS, the NDB has used financial intermediaries (FIs), such as Canara Bank in India and BNDES in Brazil, though this requires rigorous monitoring to prevent inadequate oversight of subprojects.
• The author recommends that the NDB move away from cumbersome quantitative equivalence tests and instead utilize in-country experts and staff to qualitatively assess country systems and identify shortcomings.
• The NDB is encouraged to strengthen capacity building by supporting country-specific strategies and potentially financing these efforts through a marginal levy on loans, using loan profits, or creating a dedicated capacity-building fund.

APA

South African Institute of International Affairs (n.d.). ga_th1_pb-prinsloo_20170831-1-e797fd35b7bc6600.pdf. https://saiia.org.za/wp-content/uploads/2017/08/GA_Th1_PB-prinsloo_20170831-1.pdf

Chicago

South African Institute of International Affairs. ga_th1_pb-prinsloo_20170831-1-e797fd35b7bc6600.pdf. n.d. https://saiia.org.za/wp-content/uploads/2017/08/GA_Th1_PB-prinsloo_20170831-1.pdf.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=ga_th1_pb-prinsloo_20170831-1-e797fd35b7bc6600.pdf |url=https://saiia.org.za/wp-content/uploads/2017/08/GA_Th1_PB-prinsloo_20170831-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairsndgath1pbprinsloo201708311e797fd35b7bc6600pdf, author = {{South African Institute of International Affairs}}, title = {{ga\_th1\_pb-prinsloo\_20170831-1-e797fd35b7bc6600.pdf}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2017/08/GA_Th1_PB-prinsloo_20170831-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }