Covid-19 emergency loan: Brics bank gives South Africa $ 1 billion

Press release

NBD Board of Directors approves $ 1 billion emergency aid loan to South Africa to fight Covid-19 outbreak

On June 19, 2020, the Board of Directors of the New Development Bank (NDB) approved a US $ 1 billion loan under the South Africa Emergency Assistance Program. The program aims to support the South African government in its efforts to contain the spread of Covid-19 and reduce the human, social and economic losses caused by the coronavirus outbreak.

The program will help provide essential health resources and strengthen the social safety net in South Africa. Positive impacts will include improving the resilience of the public health sector and health emergency response systems, and facilitating socio-economic recovery.

In his Statement on the response to the Covid-19 epidemic, the BND Board of Governors welcomed the establishment of an emergency aid mechanism to meet the emergency needs of the Bank’s member countries. Emergency loans to member countries could be used to finance direct spending related to tackling the Covid-19 epidemic and provide support for government measures contributing to economic recovery.

The National Treasury welcomes the loan approval and is working with the NDB on the latest technical and administrative requirements. Final loan details will be released once all processes are complete.

The complete declaration:

NDB Board of Directors approves US $ 1 billion loan for COVID-19 emergency program in South Africa

On June 19, 2020, the Board of Directors of the New Development Bank (NDB) has approved a US $ 1 billion Covid-19 emergency program loan to the government of the Republic of South Africa.

“The Covid-19 emergency program loan to South Africa will be made in response to the urgent demand and immediate funding needs of the South African government. NDB assistance will respond to urgent health needs in South Africa to overcome the Covid-19 pandemic and help mitigate the socio-economic impacts on the most vulnerable populations, ”said Mr. Xian Zhu, vice -President and Director of Operations of NDB. “Such a concentration of the Bank’s funding is in line with the emergency lending NDB extended to China and India earlier this year.

The loan will help the South African government as it rolls out its healthcare response to the novel coronavirus-19 disease and providing a social safety net to mitigate the economic impact of disease containment measures on vulnerable people. The program plans to prevent, detect and respond to the health threat posed by Covid-19, and to provide social subsidies to vulnerable groups affected by the measures implemented to prevent and contain the disease.

In its statement on the response to the Covid-19 epidemic, the NDB Board of Governors commended the NDB’s contribution to the ongoing efforts of Brics countries to address the health and economic consequences of the epidemic and stressed that the Brics would unite to fight the Covid-19 epidemic. . The NDB has established an emergency aid mechanism to meet the emergency needs of its member countries. The Covid-19 Emergency Program Loan to South Africa is the third loan approved by the NDB Board of Directors in response to the Covid-19 outbreak.

Background information

On June 16, 2020, the New Development Bank priced its first 3-year US $ 1.5 billion benchmark index Covid Response Bond on international capital markets. The net proceeds of the bond issue will be used to finance sustainable development activities in BND member countries, including emergency aid loans to Bank member countries.

The NDB was created by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in the BRICS and other emerging economies and developing countries. development, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. The NDB has received long-term AA + issuer ratings from S&P and Fitch and a long-term AAA currency issuer rating from the Japan Credit Rating Agency (JCR).

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