Why BRICS bank is loaning South Africa and China $300 million each

PUBLISHED: Tue, 24 Jul 2018 12:02:02 GMT

JOHANNESBURG (Reuters) – The New Development Bank, set up by the BRICS group of emerging economies, has approved loans of $300 million for energy projects in South Africa and $300 million for a transportation project in China.

South Africa, which will host a BRICS summit later this week in Johannesburg, is trying to diversify its energy mix to reduce its reliance on heavily polluting coal-fired power plants.

It has launched several bidding rounds for billions of dollars of renewable energy deals in recent years, with the latest expected to open later this year.

The BRICS development bank said in a statement that its $300 million loan to South Africa would be channelled via the Development Bank of Southern Africa and would focus on projects which reduce carbon dioxide emissions and boost energy efficiency.

Its $300 million loan to China is for a new metro line in the city of Luoyang. With the two projects, the bank’s portfolio of loans stands at more than $5.7 billion.

The BRICS grouping comprises Brazil, Russia, India, China and South Africa.

Russia said this month that it was in talks with the New Development Bank about borrowing more than $1 billion for infrastructure projects.

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