BRICS TO THE RESCUE: As Germany cuts resources, BRICS Bank lends $500 million to Brazil

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BRASILIA – Brazil has entered into a $500 million loan agreement, with the New Development Bank (NBD), a body linked to the BRICS, to finance waste treatment works.

The contribution comes after Germany cut funds that would be passed on to the Amazon Fund, an environmental preservation initiative that also relies on money from Norway. Berlin claims that the measure was taken on account of current Brazilian environmental policy.

Environment Minister Ricardo Salles told O Estado de S. Paulo newspaper that the funds Brazil will receive from the NBD will be with “practically zero” interest.

Created in 2015 during the BRICS summit, a group made up of Brazil, Russia, India, China and South Africa, BND is headquartered in Shanghai, China, and is expected to win an office in Sao Paulo later this year. With a subscribed capital of $50 billion, the bank provides loans to the bloc’s countries, but can also lend to other developing countries.

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In addition to the $500 million that will be loaned by the BND, Brazil is studying how much it will invest out of its pocket to complement the project of the waste treatment improvement program.

According to data from the Brazilian Association of Public Cleaning and Special Waste Companies, Brazil has 3,000 open dumps.

BRICS expert and PUC-Rio International Relations professor Paulo Wrobel states that “the Amazon has an international visibility for obvious issues,” but points out that Brazil has a number of environmental issues.

“Our main shortcoming is in infrastructure, urban sanitation and sanitation in general, environment, alternative energy [these are areas that need improvement],” Wrobel said.

Among BRICS members, Brazil ($ 621 million) is the country that has the least resources on NBD-authorized loans. The data are from 2018 and, therefore, do not account for the newest $500 million investment that is designed. China ($ 2.75 billion) tops the list with the largest on-lending, followed by India ($2.55 billion), Russia ($1.46 billion) and South Africa ($680) millions). The data is available in the 2018 annual report.

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