New Development Bank Vice President and Chief Operations Officer Xian Zhu. Picture: Motshwari Mofokeng/ African News Agency/ANA New Development Bank Vice President and Chief Operations Officer Xian Zhu. Picture: Motshwari Mofokeng/ African News Agency/ANA
Pretoria - The New Development Bank (NDB) has approved a $1 billion loan to South Africa to help the country's fight against the coronavirus (Covid-19) pandemic, the National Treasury said on Saturday.
"On June 19, 2020, the board of directors of the New Development Bank (NDB) approved [a] $1 billion emergency assistance programme loan to South Africa. The programme is aimed at supporting the government of South Africa in its efforts to contain the spread of Covid-19 and reduce human, social, and economic losses caused by the coronavirus outbreak," the Treasury said in a statement.
The programme would contribute to providing critical healthcare resources and strengthening the social safety net in South Africa. The positive impacts would include improving the resilience of the public health sector and health emergency response systems, and facilitating socio-economic recovery.
The NDB board had earlier welcomed the establishment of an emergency assistance facility to meet the emergency needs of the member countries of the bank - Brazil, Russia, India, China, and South Africa (Brics). Emergency loans to the member countries could be used to finance direct expenses related to the fight against the Covid-19 pandemic and provide support to government measures contributing to economic recovery, the Treasury said.
"National Treasury welcomes the approval of the loan and, together with NDB, are working on final technical and administrative requirements. Final details on the loan will be published once all processes have been concluded," the Treasury said.
In the NDB statement earlier, the bank's vice president and chief operations officer Xian Zhu said the NDB’s assistance would address urgent health needs in South Africa to overcome the Covid-19 pandemic and help mitigate socio-economic impacts on the most vulnerable populations.
“Such focus of the bank’s financing is in line with the emergency loans provided by the NDB to China and India earlier this year,” he said.
The NDB board of governors welcomed the bank's contribution to the ongoing efforts of Brics countries to address the health and economic consequences of the outbreak and stressed that Brics would unite to combat the Covid-19 pandemic.
On June 16, the NDB priced its inaugural benchmark US1.5 billion three-year Covid-19 response bond in the international capital markets. The net proceeds from the bond issue would be used to finance sustainable development activities in the NDB’s member countries, including emergency assistance loans, the statement said.
The NDB was established by Brazil, Russia, India, China, and South Africa to mobilise resources for infrastructure and sustainable development projects in Brics bloc and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. The NDB received AA+ long-term issuer credit ratings from international ratings agencies S&P Global and Fitch, and AAA foreign currency long-term issuer rating from Japan Credit Rating Agency (JCR).