BRICS is launching a powerful new guarantee fund via the New Development Bank (NDB) to lower financing costs and unlock private capital for developing nations. Learn how this initiative could reshape global investment.
BRICS Launches Multilateral Guarantee Fund to Attract Global Investment
As the BRICS nations gear up for their 2025 summit in Rio de Janeiro, a major financial move is about to take center stage. According to sources close to the discussions, the bloc is preparing to announce a new Multilateral Guarantee Fund backed by the New Development Bank (NDB)—a bold initiative designed to reduce financing costs and unlock greater investment flows into developing economies.
The mechanism, modeled on the World Bank’s Multilateral Investment Guarantee Agency (MIGA), will serve as a cornerstone of Brazil’s financial agenda during its rotating presidency of BRICS. Insiders say the fund will likely be featured in the official joint statement at the summit.
Initially founded by Brazil, Russia, India, and China—and later joined by South Africa—the BRICS alliance has recently expanded its membership to increase its influence in global governance. The BRICS Multilateral Guarantee (BMG) mechanism has already secured technical approval and now awaits a final signoff from finance ministers, which is expected to be a mere formality.
No New Capital, But Big Impact
Interestingly, this initiative does not require new capital contributions from member countries at this stage. Instead, it will utilize existing resources within the NDB to issue guarantees for pre-approved projects. Officials anticipate that for every $1 guaranteed by the NDB, between $5 and $10 in private capital could be mobilized—multiplying its financial impact.
“This is a politically significant guarantee instrument,” one insider noted. “It shows that BRICS is active, solution-oriented, and serious about strengthening the NDB to meet today’s global challenges.”
Technical groundwork for the fund is expected to be completed by the end of 2025, with pilot projects set to launch in 2026.
Why It Matters for Developing Nations
The new fund addresses a long-standing issue: developing countries often struggle to attract large-scale private investment in vital areas such as infrastructure, climate resilience, and sustainable development. Officials argue that using the NDB’s superior credit rating to back projects could lower risk perceptions and attract both institutional investors and commercial banks.
By enhancing the credibility of investment opportunities in emerging markets, BRICS aims to create a ripple effect that benefits not just member states, but also partner countries aligned with the group’s development goals. northcyprusinvesting.com, Investra.io