The New Development Bank (NDB), established by the BRICS group of developing countries, has approved a loan of up to $1 billion to help develop water and sanitation infrastructure in South Africa , Bloomberg reported .
The funding will be provided under South Africa’s Urban Infrastructure Financing programme, which aims to reduce infrastructure backlogs and ensure the delivery of basic services to poor households, the NDB said in a statement on August 31.
The funding was announced at the NDB's annual general meeting in Cape Town.
The NDB was established in 2015 by BRICS members Brazil, Russia, India, China and South Africa, while the United Arab Emirates (UAE), Egypt, Bangladesh and Uruguay are also members.
The bank has also decided to accept Algeria as a member, NDB President Dilma Rousseff told reporters after the meeting.
She said that while the bank's policy was to expand membership among the Global South and many of those countries had applied for membership, she was not allowed to name them and needed to assess their eligibility before approving them.
The UAE, Egypt, Iran and Ethiopia joined BRICS on January 1, 2024, but Iran and Ethiopia have yet to join the NDB. Saudi Arabia was also announced as a new member of BRICS, although the kingdom later said it was still studying the invitation to join.
While NDB aims to focus on financing long-term projects, it also wants to be accessible to private companies in need of short-term financing, Rousseff said.
She added that the NDB aims to provide 30% of its loans in member countries' currencies but has yet to achieve that target.
In addition to the South African loan, NDB has also agreed to provide a $150 million yuan-equivalent loan to China’s Bank of Communications Leasing Company (BCFL) for a national liquefied natural gas (LNG) transportation project. BCFL said the loan will be used to acquire at least three LNG carriers and help address China’s significant increase in gas demand.
The NDB has also approved revised policies on the treatment of sovereign loans and loans with sovereign guarantees. These amendments will “bring new efficiencies to the project approval cycle,” BCFL noted.
The BRICS Bank also approved a loan to the club of up to $1.5 billion, without providing further details.
