CAPE TOWN, July 17 -- The BRICS Development Bank and the Contingent Reserve "is a significant milestone for developing countries", the South African government said on Thursday.

At the just-concluded 6th BRICS summit in Fortaleza Brazil this week, the BRICS leaders agreed to establish the New Development Bank headquartered in Shanghai China. And South Africa will host the first regional center of the bank.

"South Africa welcomes the establishment of the bank and is excited about the economic potential that this institution will bring to the continent," the South African Ministry of Finance said in a statement.

The Bank will mobilize resources for infrastructure investment and sustainable development projects including transformational infrastructure projects that allow the region to take forward its regional integration agenda.

What is unique about this Bank is that it is established by developing countries who understand development challenges and have demonstrated their ability to tackle such challenges, the statement said.

The Bank will have an authorized capital of up to 100 billion U. S. dollars and a subscribed capital of 50 billion dollars equally shared by all five BRICS members.

The BRICS also signed a treaty establishing a Contingent Reserve aiming to complement the existing system of financial safeguards.