New Development Bank approves USD 1 billion COVID-19 Emergency Program Loan to Brazil
BRASILIA, Brazil, July 21, 2020 /PRNewswire/ -- On July 20, 2020, the Board of Directors of the New Development Bank (NDB) approved a COVID-19 Emergency Program Loan of USD 1 billion to the Government of the Federative Republic of Brazil.
The resources provided by the NDB will help Brazil safeguard the income of about 5 million people in vulnerable situations, including informal, self-employed and unemployed workers. The basic income guaranteed by the program allows the most economically vulnerable families to gain increased access to food and health-related goods, such as medicines and personal hygiene products, which are vital for the prevention and containment of COVID-19.
The loan will also help the Government of Brazil to ensure that strong fiscal support is in place to combat the outbreak and that priority investment projects will be implemented, thereby contributing to the economic recovery of the country. NDB's project in Brazil supplements emergency loans provided by five other multilateral development banks and development agencies – the International Bank for Reconstruction and Development (IBRD), the Inter-American Development Bank (IDB), the Development Bank of Latin America (CAF), the German Development Bank (KfW), and the French Development Agency (AFD) – who joined efforts to provide USD 4 billion of financing, to mitigate the social and economic impacts of the pandemic.
"The COVID-19 Emergency Program Loan to Brazil will contribute to the country's ongoing efforts to strengthen social safety nets and address immediate socio-economic impacts of the COVID-19 outbreak, particularly on the most vulnerable population in Brazil," said Mr. Marcos Troyjo, President of the NDB. "It also represents an important milestone for the Government of Brazil and NDB in the fight against COVID-19, in coordination with other multilateral development banks and development agencies."
The loan marks the Bank's fourth emergency assistance program to combat COVID-19, following similar loans to China, India, and South Africa, and thus raises NDB's financial support against COVID-19 to the level of USD 4 billion. It is also NDB's biggest loan approval to Brazil so far, thus contributing to expanding the share of loan approvals in the country from 8.4% of the NDB's total portfolio, to 13%.
Background information
In its Statement on Response to COVID-19 Outbreak, the NDB Board of Governors welcomed the NDB contribution to the ongoing efforts of BRICS countries to address the health and economic consequences of the outbreak and stressed that BRICS would unite to combat the COVID-19 outbreak.
On June 16, 2020, the New Development Bank priced its inaugural benchmark USD 1.5 billion 3-year COVID Response Bond in the international capital markets. The net proceeds from the Bond issue will be used to finance sustainable development activities in the NDB's member countries, including emergency assistance loans to the Bank's member countries.
The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. The NDB received AA+ long-term issuer credit ratings from S&P and Fitch and AAA foreign currency long-term issuer rating from Japan Credit Rating Agency (JCR).
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