RDIF Director General Kirill Dmitriev told the BRICS Business Council meeting here that his company signed <g data-gr-id="42">an MoU</g> with its partners in the BRICS member-states to work with sovereign funds, with the BRICS Bank and invest in the equity of infrastructure projects in these countries.
“We have signed <g data-gr-id="38">an MoU</g> with five funds from our five countries: the Russian Direct Investment Fund, the Silk Road Fund from China, the IDFC (Infrastructure Development Finance Company) from India, the Development Bank of South Africa and the Brazil BTG Pactual fund,” he said.
“With the IDFC in India, we discussed projects in hydro-generation where Russia has a lot of expertise,” Russian news agency Tass quoted him as saying. “The BRICS Bank will be doing a lot of debt <g data-gr-id="46">providing,</g> while the IFI (Infrastructure Fund Initiative) will be investing in equity,” Dmitriev said.
Highlighting cooperation with India and China, he said, the BRICS initiative is already seeing practical negotiations on specific projects. Dmitriev said the funds are forming together the IFI to work with sovereign funds, with the BRICS bank and invest in the equity of infrastructure projects. In a statement, Russian Direct Investment Fund (RDIF) said the BRICS nations have supported the initiative to set up a joint mechanism for equity investments in infrastructure projects among member countries.
RDIF, India’s IDFC group, Brazil’s BTG Pactual, China’s Silk Road Fund, and the Development Bank of Southern Africa signed a framework agreement at the BRICS summit in Ufa, it said. Under the agreement, the parties will work together to identify and finance infrastructure projects that will improve trade, economic and investment cooperation among BRICS countries.
This initiative was also supported by the BRICS Business Council. “Together, we will create an effective new tool for financing infrastructure projects in emerging economies. Our combined experience and expertise will ensure that even projects on a major scale are viable for investment,” RDIF CEO Dmitriev said. RDIF was established in 2011 to make equity co-investments.
“We will attract private investment into these projects, and in turn, substantially strengthen investment cooperation between our countries. We also plan to coordinate our efforts under this mechanism with BRICS New Development Bank,” Dmitriev said. India is hoping to get more funds for infrastructure development from BRICS bank, which will start with an initial paid-up capital of $50 billion, with each BRICS country contributing $10 billion. Its authorised capital is $100 billion.
The first meeting of the Governors of the New Development Bank took place in Moscow on Tuesday. The leaders of BRICS nations are meeting in Ufa for a two-day summit. The BRICS nations (Brazil, Russia, India, China, South Africa) account for nearly $16 trillion in GDP.
India pledges $18 bn for BRICS forex pool
India will contribute $18 billion to the $100 billion foreign-exchange reserves pool that is being set up by five nations of the BRICS grouping to help each other "in case of any problems with dollar liquidity". Brazil, Russia, India, China and South Africa have signed an agreement to set up the $100 billion pool, with maximum $41 billion coming from China. India's contribution of $18 billion to the Pool will be same as that of Brazil and Russia. South Africa would chip in $5 billion.
"The central banks of Brazil, Russia, India, China and South Africa have signed Operational Agreement on July 7, <g data-gr-id="81">2015</g> in Moscow. The Agreement outlines the terms of mutual support for member states in the framework of the Agreement on BRICS Pool of Conventional Currency Reserves," the Russian Central Bank said in a statement.
The fund will be an "insurance instrument" that members nations could draw on if they experience problems with their balance of payments. The Pool will go into force on July 30. The Operational Agreement details the working procedures of the Pool to be observed by BRICS central <g data-gr-id="78">banks,</g> and defines their rights and obligations.
"The Pool is tasked to ensure <g data-gr-id="77">mutual</g> provision of US dollars by the central banks of BRICS members in case of any problems with dollar liquidity. Thus, this new insurance network is designed to maintain <g data-gr-id="76">financial</g> stability of its member states," the statement said.
The pact on setting BRICS Pool of Conventional Currency Reserves was signed on July 15, <g data-gr-id="80">2014</g> at the summit in Fortaleza (Brazil).
Russia to take part in Indian rail projects
Russia is likely to participate in railway projects in India, funding for which could be routed through the newly-set up BRICS’ New Development Bank. Indications in this regard came today from the head of Russian Railways Vladimir Yakunin, who said negotiations are underway with India in this regard.