• BRICS plans a guarantee fund to reduce political and financial risks in developing countries.
• The fund will be managed by the New Development Bank (NDB) and unveiled at the July 2025 Rio summit.
• The initiative draws on the World Bank’s MIGA model to attract private capital for infrastructure projects.

The BRICS coalition—comprising Brazil, Russia, India, China, South Africa, and the new members Egypt, Iran, and Ethiopia welcomed in 2024— will create a guarantee fund aimed at boosting private investment in developing nations. The fund aims to reduce financial and political risks that deter investors from committing capital to infrastructure projects in unstable or low-yield environments.

According to multiple media reports on July 3, the fund will be managed by the New Development Bank (NDB). The NDB, established by BRICS in 2015 to finance infrastructure and sustainable development, will manage the fund. It will provide guarantees to cover risks such as expropriation, war, currency transfer restrictions, and breach of contract. The goal is to make projects more appealing to international private investors, especially those wary of political or economic instability.

BRICS will officially present the fund at their summit on July 6-7, 2025, in Rio de Janeiro, Brazil, which currently holds the rotating presidency of the group.

A Model Inspired by MIGA

The fund’s design takes inspiration from the Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group. MIGA offers political risk insurance and credit guarantees to private investors and lenders, limiting losses from unforeseen non-commercial events.

By adopting a similar model, BRICS seeks to support large-scale projects in infrastructure, energy, transport, and climate transition. The fund may also cover currency risks and other systemic challenges unique to emerging economies, reassuring private financiers about the security of their investments.

A Strategic Move for BRICS’ Financial Influence

This initiative fits into BRICS’ broader strategy to enhance financial sovereignty among Southern countries and promote South-South cooperation in development financing. Since its inception, the NDB has funded over 100 projects worth $33 billion. The new guarantee fund aims to increase this impact by attracting more private capital and sharing risks among stakeholders.

This article was initially published in French by Chamberline Moko

Edited in English by Ange Jason Quenum