NDB Board of Directors approves RMB 7 billion Emergency Program Loan for Supporting China’s Economic Recovery from COVID-19
On February 26, 2021, the Board of Directors of the New Development Bank approved RMB 7 billion Emergency Program Loan to the People’s Republic of China for Supporting China’s Economic Recovery from COVID-19. The Program is to support China’s priorities for economic recovery efforts in response to COVID-19, including (i) supporting the restoration of production activities in key sectors adversely affected by the COVID-19 pandemic; and (ii) supporting the measures to reinforce and sustain the achievements of early economic recovery.
Following the first emergency loan of RMB 7 billion to China approved and fully disbursed in 2020, the captioned Program is the NDB’s second emergency assistance loan to China in response to COVID-19. Based on the current stage of economic recovery in China, the Program will support restoring production and job creation in the country. The Program will also contribute to sustainable development of China’s economy over the long term.
The Program will be implemented by two implementing agencies, namely the Export-Import Bank of China (EximBank) and the Agricultural Development Bank of China (ADBC). EximBank and ADBC will in turn provide financing for projects in the sectors directly and mostly hit by the COVID-19 pandemic such as trade, logistics, agriculture, health, labor-intensive infrastructure sectors, as well as innovative and high-tech infrastructure promoted by the Chinese Government to sustain recovery and to support sustainable development. The implementation arrangement maximizes the envisaged impacts of the Program through on-lending by the leading development banks in China.
Supporting the Government’s prioritized sectors, the Program will contribute to mitigating the adverse impacts of COVID-19 on the Chinese economy. More specifically, the Program will help to revive economic activities and resume productivity in the key sectors, and consequently generate employment opportunities in the near term. Additionally, the Program will also help to achieve sustainable economic development over the medium- to longer-term and contribute to full restoration and further development of supply chains, as well as the development of infrastructure in line with China’s New Infrastructure Initiative.
The NDB established the Emergency Assistance Facility in April 2020, to provide up to USD 10 billion in crisis-related assistance to its member countries, including USD 5 billion for financing healthcare and social safety-related expenditures, as well as USD 5 billion for supporting economic recovery efforts. In total, the NDB Board of Directors so far has approved seven COVID-19 related emergency assistance programs with a total amount of around USD 7 billion.
The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.