Regional entry to Brics could see increased green economy agreements: Egypt, the UAE, Saudi Arabia, and Iran were among the six countries invited to join the bloc of emerging economies known as the Brics during the organization’s annual summit in South Africa last week. Capping three days of talks, the leaders of Brazil, Russia, India, China, and South Africa announced an agreement on a framework for expanding the bloc and said six new members would join in 2024. The agreement should increase foreign direct investments and facilitate trade exchange through incentive packages, which is expected to bring significant green agreements, especially as the Brics countries recently made strides to ramp up their green sectors, the Washington Post writes.

Access to the New Development Bank: Joining the Brics would allow the four countriesaccess to the USD 100 bn pool of foreign currency the group uses to lend each other funds during emergencies. The World Bank-inspired New Development Bank (NDB) has approved nearly USD 33 bn in loans for water, transport, and other infrastructure projects since it began operations in 2015, the news outlet added. Egypt joined NDB last April, allowing the country to access finance from the bank for development projects.

More foreign direct investments: The four countries' entrance into the Brics signals their large economic potential and further integration within the global financial system, which will likely attract inflows from both member and non-member countries. Annual foreign direct inflows to the bloc more than quadrupled from 2001 to 2021 and contributed significantly to gross fixed capital formation, according to the UN.

The ball is already rolling: Brazil and Saudi Arabia signed 25 MoUs during the Brazilian-SaudiInvestment Forum earlier this month to boost bilateral cooperation in desalination, water treatment, and agriculture. The UAE joined the bloc’s multilateral Shanghai-based development bank in 2021 and invested in infrastructure, food security, clean energy, transportation, and industry. In May, Brazilian mining firm Vale signed an agreement with the UAE’s AD Ports Group to develop a mega steelmaking hub to source materials essential to low-carbon steel production in the UAE. China’s LONGi is looking to unlock investments in Egypt’s solar energy and green hydrogen production sectors.

Trade in key materials for green manufacturing likely to get a boost: Trade between the bloc’s five existing members surged 56% to USD 422 bn over the five years from 2017 through 2022, WaPo writes. The four countries have already established trade exchanges with Brics members in materials needed for green projects such as importing solar panels from China. The region saw an increase of more than 200% in PV module imports from China in the first two months of this year, with the UAE and Saudi Arabia accounting for 62% of the region's overall market.

And low-carbon fertilizers: Saudi Arabia’s Ma’aden signed an agreement with Indian agricultural chemicals maker Coromandel International in May to supply low-carbon blue ammonia. The agreement came after its first shipments of low-carbon blue ammonia to Chinese petrochemical producer Shenghong Petrochemicals as part of an agreement to supply 25k tons of blue ammonia.

It's not a one-way street: The closer cooperation between the Brics and the new members could see increased foreign acquisitions by regional players. Last month, Saudi Arabia’s Manara acquired a 10% stake in Brazilian miner Vale’s base metals unit at an enterprise value of USD 26 bn. Abu Dhabi’s Mubadala Capital-backed Acelen will invest up to USD 2.4 bn over the next 10 years to produce green diesel and sustainable aviation fuel in Brazil. Dubai-based green mobility company NWTN Motors acquired a 27.5% stake in EV manufacturer China Evergrande New Energy Vehicle Group (EVGRF). UAE’s Amea Power will build a USD 120 mn, 120 MW solar energy plant in South Africa.

Agreements on climate policy aren’t a strong suit: Divergent interests and stances on political and security issues have made it difficult for Brics to agree on how to tackle climate change, but critical decisions have shifted towards supporting renewables activities and more efficient energy use in the developing world, the independent journalism organization Dialogo China writes. The group holds gatherings of energy ministers and other high-level energy officials and established the Brics Energy Research Platform in 2018, the paper added.

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