Multilateral banks crucial for building trust and bankability in BRICS investments

Finance Minister Nirmala Sitharaman addressed an audience of BRICS finance chiefs and central bank governors in Jaipur, emphasizing that multilateral development banks are indispensable for fostering confidence and bankability in private‑sector projects across the bloc.

She noted that the core difficulty for BRICS members is not the scarcity of capital alone but the absence of a reliable, predictable framework that can assure investors of long‑term stability. Multilateral banks can bridge this gap by offering risk mitigation tools, credit enhancements and technical expertise, thereby converting tentative interest into firm commitments.

Sitharaman pointed to India’s recent reforms as a practical illustration. Over the last decade, the Indian government has amplified public capital expenditure and enacted structural reforms that have fortified highways, rail networks, ports, logistics corridors, digital services and energy infrastructure. This comprehensive approach has turned public spending into a catalyst for private investment.

Key policy instruments introduced by India include Viability Gap Funding for projects that are socially essential yet financially thin, the Hybrid Annuity Model to share construction risk, and a Credit Enhancement Mechanism that improves the bankability of projects seeking loans.

The creation of Infrastructure Investment Trusts (InvITs) has further enabled the recycling of capital and drawn long‑term institutional investors into the infrastructure space.

Looking ahead, the Union Budget for 2026‑27 will feature targeted measures to simplify private‑sector participation, such as launching dedicated rail freight corridors, new high‑speed rail lines, expanding national waterways and a coastal cargo promotion scheme.

The seminar concluded with a wide‑ranging panel discussion that brought together senior policymakers, multilateral agency representatives, private‑sector leaders, think‑tank analysts and academic experts from the BRICS community.