The BRICS group of developing nations is preparing to unveil a new multilateral guarantee fund, backed by the New Development Bank (NDB), aimed at reducing financing costs and stimulating investment in emerging markets, according to sources familiar with the plan.

Modelled on the World Bank’s Multilateral Investment Guarantee Agency (MIGA), the proposed BRICS Multilateral Guarantee (BMG) mechanism is designed to attract private capital by mitigating investment risks, the sources told Reuters. The initiative comes amid shifting global financial dynamics and concerns over US economic policy uncertainty.

Brazil, which holds the rotating BRICS presidency this year, views the fund as a central part of its financial agenda. The sources added that the BMG mechanism is expected to be highlighted in the joint statement at the upcoming BRICS summit in Rio de Janeiro next week.

Initially founded by Brazil, Russia, India, China, and later joined by South Africa, the BRICS bloc has recently expanded its membership to include other developing nations, aiming to enhance its influence in global economic governance.

The guarantee mechanism, developed within the NDB, has already secured technical approval from member states and is awaiting final endorsement from the BRICS finance ministers, which is expected to be a procedural step.

The fund will utilise existing NDB resources and does not require fresh capital contributions from member nations at this stage. While no specific funding target has been disclosed, officials involved in the discussions estimate that every dollar in guarantees could unlock between five and ten dollars in private investment for pre-approved projects.

One source described the initiative as a politically meaningful step, signalling that BRICS is “actively working on solutions” and reinforcing the role of the NDB in addressing today’s global challenges.

The fund’s technical groundwork is expected to be completed by the end of 2025, and pilot projects will receive guarantees starting in 2026.