- BRICS plans to introduce a new investment guarantee fund for member countries.
- The fund will be supported by the New Development Bank to reduce financing expenses.
- Leaders are expected to announce the initiative at the 17th BRICS summit in Rio de Janeiro.
- The mechanism is designed to lower borrowing costs and provide more stable investment conditions.
- The new fund aims to encourage investment and challenge Western financial dominance.
BRICS member nations will announce a new guarantee fund to encourage investments within the bloc during their 17th summit in Rio de Janeiro. The fund, named the BRICS Multilateral Guarantee (BMG), is backed by the New Development Bank (NDB) and aims to lower financing costs for projects among member countries.
According to sources familiar with the matter, the program has received technical approval from the bloc, and the finance ministers are expected to formalize the arrangement during the summit. The initiative is modeled after the World Bank’s Multilateral Investment Guarantee Agency (MIGA), which protects investors against risks when economic policies are uncertain.
A source close to the project described the fund as “a politically significant guarantee instrument” and explained that it “sends a message that BRICS is alive, working on solutions, strengthening the NDB, and responding to today’s global needs.” The guarantee fund will work as an in-house facility, helping member nations access funds more easily and at lower costs.
The group intends to use the BMG to bypass U.S. and Western dominance in global finance and is presenting the fund as a step toward a more multipolar financial world. The fund’s success will depend on its ability to attract private fund participants and institutional investors, who will need to work with the NDB to manage financial risks.
Although the mechanism is set for announcement, it may face challenges as BRICS works to bring in larger private investment firms to strengthen and sustain the fund. Commercial banks and institutional investors will play a key role in supporting the NDB’s efforts to keep the fund viable. The details of the fund and official signatures are expected to be completed during the summit discussions in Brazil.
For more information, see the full report on Reuters.
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