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BRICS Bank comes to Rio Grande do Sul's rescue

Tuesday, May 14th 2024 - 20:51 UTC
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Former Brazilian President Dilma Rousseff will chair the NDB until July 2025 Former Brazilian President Dilma Rousseff will chair the NDB until July 2025

The Shanghai-based New Development Bank (NDB) will grant funding worth R$ 5.7 billion (US$ 1.1 billion) to rebuild the Brazilian State of Rio Grande do Sul still grappling to recover from the unprecedented storms since April 29, Agencia Brasil reported Tuesday. The NDB, also known as the BRICS Bank, will release the money through a partnership with the Banco do Brasil (BB), the National Bank for Economic and Social Development (Banco Nacional de Desenvolvimento Econômico e Social - BNDES), and the Regional Development Bank of the Far South (Banco Regional de Desenvolvimento do Extremo Sul - BRDE).

The announcement was made Tuesday by New Development Bank (NDB) President and former Brazilian head of state Dilma Rousseff through an X posting. Rousseff dubbed Rio Grande do Sul's plight difficult and painful and mentioned a scenario of public calamity. “I know that these have been weeks of great pain and sadness. I spoke with President [Luiz Inacio] Lula [da Silva] and Governor Eduardo Leite to deal with this dramatic situation and define how we could provide financial aid.”

“The BRICS Bank is committed and will work to rebuild and restore the state's infrastructure. We want to help people rebuild their lives. We are going to allocate resources to the state as quickly as possible. It will be US$ 1.115 billion. That means R$5.750 billion,” Rousseff wrote.

“In partnership with the BNDES, we're going to release US$ 500 million, with US$ 250 million earmarked for small and medium-sized businesses, US$ 250 million for environmental protection, infrastructure, water, sewage treatment, and disaster prevention works,“ she added.

”In partnership with Banco do Brasil, the NDB will allocate US$ 100 million for agricultural infrastructure, storage projects, and logistics infrastructure,“ she went on.

”In partnership with BRDE, we're going to earmark US$ 20 million for urban development and mobility projects and water resources,” she also explained.

Another US$295 million would also be spared in a second contract with BRDE. “We will allocate the funds to urban and rural development works, basic sanitation, and social infrastructure. US$ 200 million will be available to be financed directly by the NDB, which could include infrastructure works, urban roads, bridges, and highways,” Lula's fellow Workers' Party leader also noted.

The management of these funds worth R$ 5.750 billion is flexible, Rousseff elaborated. ”The allocation of this money can be directed according to the urgencies, priorities, and needs of the state of Rio Grande do Sul,” she wrote.

“I'm sure that, thanks to the strength of the people of Rio Grande do Sul, the solidarity of the Brazilian people and the international community, this crisis will be overcome. We must take all measures to ensure that it never happens again,” she summarized.

The BRICS Bank was created in December 2014 to expand financing for infrastructure and sustainable development projects in the BRICS and other emerging economies. By early 2023 the NDB had around US$ 32 billion in approved projects of which around US$ 4 billion were invested in Brazil, mainly in highway and port projects. Since 2021, the BRICS Bank has been made up of Bangladesh, Egypt, the United Arab Emirates, and Uruguay in addition to Brazil, Russia, India, China, and South Africa.

Rousseff was elected president of the NDB in March last year and will remain in her post until July 2025, when Brazil's term at the helm of the financial institution ends.

Besides the NDB's initiative, the Development Bank of Latin America and the Caribbean (CAF) also announced on Tuesday a package of up to US$ 746 million in financial resources to help Rio Grande do Sul.

(Source: Agencia Brasil)

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