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BRICS to Launch Guarantee Fund to Boost Investment and Lower Finance Costs
New BRICS Multilateral Guarantee Fund backed by NDB aims to challenge Western financial dominance
▪️ BRICS to announce a new guarantee fund backed by the New Development Bank (NDB) to reduce investment risk and financing costs.
▪️ The BRICS Multilateral Guarantee (BMG) Fund is modeled after the World Bank’s MIGA and will be a central theme at the 17th summit in Rio.
▪️ The initiative signals BRICS’ push toward a multipolar financial order—but attracting institutional support will be key to success.
The BRICS alliance—comprising Brazil, Russia, India, China, and South Africa—is preparing to unveil a new financial tool: the BRICS Multilateral Guarantee (BMG) Fund, a mechanism designed to stimulate investment and reduce capital costs among its members.
According to Reuters, the fund will be officially announced during the upcoming 17th BRICS Summit in Rio de Janeiro, hosted by Brazil. The New Development Bank (NDB) will administer the BMG Fund, which is modeled on the World Bank’s Multilateral Investment Guarantee Agency (MIGA).
A Strategic Move Toward Financial Sovereignty
The guarantee fund represents a bold step by BRICS to counterbalance the financial influence of the West, particularly amid concerns over unpredictable U.S. economic policy shifts.
By offering in-house guarantees on investments made within the bloc, the BMG Fund aims to reduce reliance on Western-led financial institutions and cut the cost of borrowing for major development projects.
“This is a politically significant guarantee instrument,” said one source close to the matter. “It sends a message that BRICS is alive, working on solutions, strengthening the NDB, and responding to today’s global needs.”
Technical Approval Complete, Formal Launch Imminent
Insiders confirmed that the BMG Fund has already received technical approval from all BRICS member states. Its formal endorsement by finance ministers is expected to take place during the summit, which would make the fund operational.
The announcement could be a defining moment for the BRICS bloc as it positions itself as a global counterweight to institutions such as the World Bank and International Monetary Fund (IMF).
Challenges Ahead: Private Capital Participation Needed
While the BMG Fund is an ambitious initiative, its long-term viability depends on attracting institutional investors and major commercial banks. These players will be essential in helping the NDB manage risk and mobilize significant capital.
The fund’s success will hinge on whether it can convince private sector financiers that BRICS nations present secure and profitable investment opportunities.
This will require clear risk-sharing frameworks, attractive terms, and strong governance standards.
Toward a Multipolar Financial World
The launch of the BMG Fund reflects BRICS’ broader goal of reshaping the global financial order. As the bloc explores alternatives to dollar-based systems, it continues to build new financial architecture aimed at reducing dependency on Western financial institutions.
From the NDB’s expanding role to ongoing de-dollarization efforts, BRICS is methodically crafting a multipolar financial ecosystem.
The BMG Fund could become a cornerstone of this vision—if it gains sufficient backing from public and private sectors alike.
@ Newshounds News™
Source: Watcher.Guru
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