BRICS to Launch Guarantee Fund via NDB to Boost Investments
The BRICS grouping—comprising Brazil, Russia, India, China, South Africa, and new member nations—is preparing to launch a Multilateral Guarantee Fund within the framework of the New Development Bank (NDB), according to a report by Reuters. The fund is aimed at reducing borrowing costs, enhancing project bankability, and attracting private capital into infrastructure and climate-focused initiatives across BRICS and developing economies.
BRICS Fund Modeled on MIGA Framework
As per Reuters, the guarantee mechanism is inspired by the World Bank’s Multilateral Investment Guarantee Agency (MIGA) model. It will provide credit guarantees instead of fresh equity or capital infusions. The technical structure has already received approval from all BRICS member nations and awaits final clearance at an upcoming meeting of BRICS finance ministers, which is expected to be a formality.
Credit Guarantees to Unlock Private Capital
The fund will tap into existing NDB capital to issue guarantees, potentially mobilizing $5 to $10 of private investment for every $1 guaranteed. Officials told Reuters that the NDB’s superior credit rating, relative to several BRICS nations, makes it an ideal vehicle for de-risking long-term infrastructure and sustainability projects. The guarantees will primarily target energy, climate adaptation, transport, and digital infrastructure sectors.
Rio Summit Launch, 2026 Rollout
The official launch is expected at the upcoming BRICS summit in Rio de Janeiro, with Brazil—currently holding the BRICS presidency—leading the announcement. According to Reuters, the technical groundwork for the fund will be completed by late 2025, with pilot projects expected to begin receiving guarantees in 2026.
Strategic Objectives and Global Relevance
The fund is designed to offer BRICS nations and the wider Global South an alternative to Western-dominated financial institutions, particularly amid rising interest rates and global capital flight from emerging markets. Reuters notes that BRICS countries have faced increasing challenges in attracting private investment for essential public infrastructure. The new mechanism is expected to bridge financing gaps, improve investor confidence, and enhance NDB’s profile as a credible multilateral lender.
Key Highlights
- Multilateral Guarantee Fund will operate within the NDB, using credit enhancements rather than capital disbursements.
- Private capital mobilization ratio targeted at 5–10x the guaranteed amount.
- Launch at Rio summit, technical rollout by end-2025, and project execution in 2026.
