Latin American development bank CAF and New Development Bank (NDB) on Tuesday threw their weight behind efforts to help the southern Brazilian state of Rio Grande do Sul, which has been hit by torrential rain and deadly floods.

CAF pledged a $746 million funding package, while the Shanghai-based NDB, known as the BRICS bank, said it will provide $1.1 billion for the state.

“We want to provide immediate help but also help rebuild what has been destroyed in a more resilient way in the longer term,” Esfanía Laterza, CAF’s representative in Brazil, told LatinFinance.

Almost two-thirds of CAF’s package ($500 million) has already been approved and will go to Brazilian development bank BNDES.

CAF will also grant a $60 million credit line to the regional development bank for the far south of Brazil to help the local population and small businesses. It said interest rates will be lower than usual loans, and maturities will be longer.

The remaining funds will go to the federal government to finance resilient infrastructure ($75 million); the state’s capital city of Porto Alegre, which has been devastated by floods ($80 million); and to Badesul, the development agency of the state of Rio Grande do Sul ($30 million).

CAF and other development banks pledged $50 billion in 2022 to fund climate action. Laterza said the current crisis in Rio Grande do Sul “is not the first” and follows “fires in Chile, drought in Bolivia and Paraguay. We have had several events caused by climate change.”

BRICS BANK

NDB, for its part, will channel half a billion dollars to BNDES, including $250 million for loans to small and medium-sized businesses and $250 million for environment-related investments and disaster prevention.

Of the remainder, $295 million will go to the flood-hit region’s development bank to fund urban infrastructure; state-owned Banco do Brasil will receive $100 million for agriculture-related projects; and NDB itself will invest $200 million in infrastructure, including roads and bridges.

The financing pledges for Rio Grande do Sul follow a $1.1 billion package from the Inter-American Development Bank last week.