Brazil allocates BRL 10 bi to boost climate fund for sustainability
The National Bank for Economic and Social Development (BNDES) and the Ministry of the Environment and Climate Change (MMA) unveiled the revitalized National Climate Change Fund on Thursday, August 24. With an injection of BRL 10 billion, the fund is poised to finance an array of sustainable development projects.
Established in 2009, the fund boasts two financing mechanisms: a repayable system managed by BNDES and a non-repayable avenue operated by MMA. The recent commitment pertains to the refundable financing segment. A portion of these funds will be raised through the issuance of sustainable bonds, which are being developed by the Ministry of Finance. It's worth noting that the fund already boasts a portfolio of over BRL 2 billion in credit, secured through BNDES.
Marina Silva, the Minister for the Environment and Climate Change, stressed that these funds will be instrumental in Brazil's pursuit of its commitments under the Paris Agreement. She remarked, "The aim is not only to address the issue of climate change but also to confront inequalities. Our goal is to shift from the mere mitigation and adaptation paradigm towards transforming the economic, social, and cultural underpinnings of the existing development model."
The Fund's operational spheres encompass resilient and sustainable urban development, green industry, transport logistics, public transport, green mobility, energy transition, native forests, water resources, green services, and innovation. Interest rates will be set by the National Monetary Council (CMN) for each of the funding lines.
Committee Expansion
In tandem with this announcement, an expansion of the Fund's Management Committee was disclosed. This committee is entrusted with authorizing project financing and recommending studies contracting, aligning with investment directives and priorities established every two years. The committee will increase from the current 12 to 28 members, including representatives from civil society, spanning sectors such as family farmers, indigenous communities, quilombolas, as well as representation from states and federal entities.
