BRICS Bank to Allocate $100 Million to South Africa for Infrastructure Projects

The New Development Bank (NDB) and the Development Bank of Southern Africa (DBSA) announced on Friday the signing of a $100 million loan agreement for the sustainable infrastructure development program in South Africa.

According to a statement by NDB, funds will be allocated to boost the country's economic growth, advance social and digital infrastructure, and support clean and renewable energy projects. The loan is provided in line with NDB's 2022-2026 strategy, which aims to tackle infrastructure issues while also expanding into new sectors of the South African economy, including social and digital.

"Signing of this loan agreement and recommitting to the DBSA is a testament of the strategic partnership between NDB and DBSA. Our collaboration highlights a shared vision of promoting sustainable infrastructure development initiatives and driving economic growth in South Africa, in line with its national development plans and priorities," said Vladimir Kazbekov, Vice-President and COO of the New Development Bank.

It was noted that the loan will bolster socio-economic growth in South Africa and potentially aid in mitigating climate change by increasing power generation from renewable energy sources. Moreover, it will improve the quality and accessibility of healthcare services and provide affordable and secure housing. The program is also expected to expand broadband networks throughout the country to enhance digital connectivity.

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The agreement is seen as a continuation of NDB's strategic cooperation with DBSA, one of the major development finance institutions operating across Sub-Saharan Africa and headquartered in South Africa. This is NDB's second loan to DBSA, building on the successful implementation of the initial $300 million loan designated for renewable energy.

"This partnership aligns with both institutions' commitment to the United Nations Sustainable Development Goals (SDGs) and represents a positive step toward achieving a more sustainable and prosperous future for South Africa and its people. It is through these multi stakeholder engagements such as BRICS, that we can accelerate economic growth across our respective countries," said Boitumelo Mosako, DBSA Chief Executive Officer.

The New Development Bank was established by the BRICS countries through an intergovernmental agreement signed at the 6th BRICS summit in Fortaleza, Brazil, in July 2014. Its primary role is to finance infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries.

The bank had previously been awarded "AA+" international credit ratings by both Fitch Ratings and S&P Global Ratings, which have allowed it to effectively raise long-term funding from international and local capital markets.

Since its establishment, the bank has approved 98 projects totaling $33.2 billion in support of various sectors, including transportation, water supply, clean energy, digital and social infrastructure, and urban development.

In 2021, the New Development Bank initiated an expansion of its membership and welcomed Bangladesh, Egypt, the United Arab Emirates, and Uruguay as new member countries.