BRICS Bank Opens up Financing to Non-Member Countries
The New Development Bank (NDB), a financial institution created by the BRICS countries (Brazil, Russia, India, China and South Africa) is now available to finance non-member countries, becoming a source of funding for public-private projects.
The issue was addressed at the latest BRIC summit in Johannesburg at the end of July, which was attended by the presidents of Angola, João Lourenço and Mozambique, Filipe Nyusi, two countries seeking to diversify their access to sources of financing , for investment projects.
Luwellyn Landers, the South African Deputy Minister for International Relations and Cooperation, said that the NDB is available to finance all countries, including non-BRIC countries, and that it can support public-private partnerships through loans, guarantees, shareholdings and other financial instruments.
According to Landers, the African department of the NDB will assess the projects for Africa.
During the Summit, the NDB approved two projects, one for South Africa and one for China, both with loans totalling US$600 million, in addition to meeting with the BRICS Business Council.
The NDB will provide a US$300 million, non-sovereign-guaranteed loan to the Development bank of Southern Africa (DBSA) for a project to reduce greenhouse gas emissions and develop the energy sector, and another loan of the same amount for a project in China, for construction of the Luoyang Metro.
With the approval of the two new projects, the bank’s loan portfolio has increased to 23 projects with an aggregate value of US$5.7 billion, much of which is to finance energy and infrastructure.
According to NDB President K.V. Kamath, by the end of this year, total approvals will reach about US$7.5 billion.
“Our focus is to finance conventional infrastructure, as well as to use transforming technologies for development. In addition to the traditional set of loan products, we will begin to offer financial products not related to financing, such as guarantees and credit enhancements. We will work with speed, scale and have a positive impact, quickly and effectively,” said the NDB chairman.
The NDB chairman, the Brazilian Foreign Minister Aloysio Nunes Ferreira and Brazilian Finance Minister Eduardo Refinetti Guardia, The Deputy Chairman of the Board of Governors of the Bank, also signed an agreement to host the Americas Regional Office (ARO) of NBD in Brazil.