BNDES seals a partnership with the new Brics bank

Jul 9, 2015

The Brazilian institution together in Russia with other development banks signed a memorandum of understanding with NDB
This accord paves the way to strengthening economic relations between the emerging nations

On July 9, the BNDES and other developing banks from the Brics bloc signed an accord for cooperation between the member institutions and the New Development Bank. The document was signed during a Brics summit meeting, held in the city of Ufa, in Russia.

This accord establishes the basis for development banks to cooperate with the NDB. The new bank was formally created at a previous summit meeting last year, in the city of Fortaleza, in Brazil. The bloc comprises Brazil, Russia, India, China and South Africa.

In the text, the parties involved have express their willingness to explore cooperations possibilities by making resources available for financing, co-financing and structuring guarantees in projects aiming not only at infrastructure, but also sustainable development. Projects of mutual interest can be implemented either in the Brics member countries of in other developing nations.

Also mentioned in the accord as a possible focus of partnerships is financing for projects related to innovation and technology, energy efficiency and environmental security, in addition to initiatives with important social impact on the economies in member countries.

The types of cooperation established include; making loans, issuing securities, creating financing programs through project finance (in which the guarantee is the project itself), as well as structuring investment funds. Proposing sound cooperation initiatives must be in compliance with the specific regulations of each financial institution that is a signatory to the accord.

Technical cooperation between the institutions is also part of the deal, as is the exchange of information on projects with the potential for support and mechanisms for monitoring.

Besides the BNDES, other signatories include the Vnesheconombank, from Russia, India’s Export-Import Bank, the China Development Bank (CDB), and the Development Bank of Southern Africa (DBSA).