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BRIC Bank To Invest US$ 621 Million in Projects in Brazil

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Brazil will receive US$ 621 million from the New Development Bank (NBD), a financial institution created in 2015 by the group formed by Brazil, Russia, India, China and South Africa, the BRICS. In the first three years of operation of the institution, four Brazilian projects were approved, covering the areas of renewable energy (wind, solar and hydroelectric), road construction, railroad reconstruction, sanitary sewage, telecommunications and Petrobras refineries. The data are from the BRICS Joint Financial Architecture study: the New Development Bank launched (17) by the Institute of Applied Economic Research (Ipea).

The study estimates that the infrastructure investment deficit in developing countries is $ 1 trillion and $ 1.5 trillion per year. Created to provide credit for infrastructure and sustainable development projects in BRICS and other developing countries, the NDB approved 30 projects totaling $ 8.1 billion between 2016 and 2018.

According to the survey, almost a third of the value goes to financing in the transportation sector, while 26% is directed to clean energy. In addition to these sectors, the bank is also focused on contemporary projects in the areas of urban and rural mobility, water supply and use efficiency, flood protection, social and urban infrastructure and clean production (CO2-sparing activities).

Brazil, as one of NDB’s five shareholders, has already contributed US$ 1 billion by 2019 and is expected to earmark another US $ 1.05 billion for the institution by 2022. To date, the bank has received contributions of US$ 5.3 billion its founding partners, and the goal of paying capital until 2022 is $ 10 billion.

Together, the BRICS countries have a 33% share of the global product, 42% of the world population and 43% contribution to global output growth, according to International Monetary Fund (IMF) data for 2018.

NDB is headquartered in Shanghai, China, as well as an office in Johannesburg, South Africa. In November 2019, an office is planned to open in Brazil, in the city of Sao Paulo. There is also an expectation of creating a representation in the federal capital. In 2020, Brazil will appoint the new president of the bank, according to Ipea.