In order to develop and strengthen economic ties and investment cooperation between BRICS countries, in 2010 state financial institutions for development and export support of the BRICS nations entered into a Memorandum on cooperation, thus creating the BRICS interbank cooperation mechanism.
One of the main purposes of cooperation is to set up a scheme designed to provide financing and banking services for future investment projects that could be beneficial for the economic development of the BRICS countries.
The participants of the BRICS interbank cooperation mechanism are the Brazilian Development Bank (BNDES), State Development Corporation «VEB.RF» (Russian Federation), Export-Import Bank of India, China Development Bank Corporation, Development Bank of Southern Africa (DBSA).
On the basis of agreements that have been signed within the framework of the BRICS interbank cooperation mechanism (ICM), the member banks have taken steps towards developing multilateral financial cooperation within the BRICS countries and created basic mechanisms for settling payments and financing investment projects in local currencies.
In 2020 Russia is becoming a chairman of BRICS, and VEB.RF as a key Russian development institution is assuming the role of the chairman of BRICS Interbank cooperation mechanism. Within the framework of our presidency our agenda Is the following:
- We plan to expand cooperation in urban development. In accordance with United Nations’ data, 14 out of 20 cities with the biggest population density are in BRICS countries. Three quarters of Russia’s population live in cities and towns. All BRICS countries are interested in negotiating the implementation of projects in modernisation of housing, utilities, roads, public transport, and municipal solid waste management.
- Another important topic is financing for infrastructure development. We need to develop reliable high-quality infrastructure financing mechanisms. VEB.RF also supports the interaction of national digital platforms for infrastructure development.
In Rio de Janeiro (Brazil), the BRICS ICM’s members signed an agreement on cooperation in mobilization of private investment in infrastructure. The BRICS Inter-Bank Cooperation Mechanism will create a working group to study business cases, financing formats, project selection models and legal innovation success stories which contribute to mobilization of private investment in infrastructure.
- We will pay great attention to pursuing the United Nations 2030 Agenda for Sustainable Development, including financing for green economy projects. BRICS countries are facing a challenge: to ensure a higher rate of economic growth, and, at the same time, preserve the environment for future generations.
- We attach a paramount importance to settlements in national currencies during trade and financial operations. From the onset, BRICS was built by the leaders of our countries on the principles of greater sovereignty and independence. The use of national currencies is an important step in this direction.