Brazil may attract nearly $6B in funds for land restoration
Around 1.5 million hectares of degraded land across Brazil could be recovered by 2027 with the funding provided by 11 financial institutions in the second auction of degraded areas under the Eco Invest Brasil program. The institutions contributed BRL 17.3 billion in catalytic funds, which could unlock up to BRL 31.4 billion (nearly USD 6 billion) in total public and private investments.
This week, Brazil’s National Treasury announced the results of the second auction of the program, launched last year, which aims to mobilize private capital for sustainable projects. Eco Invest Brasil comes under the government’s Ecological Transformation Plan, unveiled in 2023.
Through catalytic funding, the government and private financial institutions make philanthropic contributions with greater risk tolerance, taking into account the projects’ social impact. This is money that can leverage resources for conventional investments, regulated by market principles.
Of the BRL 17.3 billion raised at the auction, BRL 16.5 billion are said to come from Eco Invest Brasil’s public catalytic capital line.
The auction
Announced in April, the second Eco Invest Brasil auction aimed to raise funds to recover around 1.5 million hectares of degraded land in all of Brazil’s six biomes – the Atlantic forest, the cerrado, the caatinga, the pampa, the pantanal, and the Amazon.
Proposals were submitted until July 21, and the projects had to follow strict environmental criteria, including soil recovery and the preservation of fauna and flora.
The assessment of each bid was based on the leverage proposed and the amount of hectares to be recovered, with a required minimum of BRL 100 million. The funds will be used by the Ministry of Agriculture and the Ministry of the Environment and Climate Change.
The auction received technical support from the Inter-American Development Bank (IDB), which helped design the credit lines, and from the UK Embassy in Brazil, which promoted financial solutions that combine attracting private capital with a positive socio-environmental impact. According to the IDB, the recovered area could generate over 170 thousand jobs.
The destination of resources
The funds will go to rural producers, agricultural cooperatives, and agribusiness companies – such as bio-supply manufacturers, agricultural technology companies, meatpackers, food processors, biofuel plants, and traders. The aim is to ensure that environmental restoration is coupled with social as well as productive inclusion.
Among the program’s requirements are the continuous monitoring of the environmental impact, including the measurement of greenhouse gas emissions, and the periodic analysis of soil quality and of the expansion of permanent vegetation cover. The financial institutions must also allocate at least half of their investment portfolios to food production with an emphasis on animal protein and crops. The recovery of the caatinga will also be prioritized.
The first auction
Approved in November 2024, Eco Invest Brasil’s first auction attracted BRL 6.81 billion in catalytic public funds from the National Treasury. Banks are seeking BRL 37.55 billion in private capital for the projects, with a total investment potential of BRL 44.36 billion.
According to the National Treasury, around 50 percent of the funds in the first auction will be earmarked for energy transition, with an emphasis on biofuels, sustainable public transport, and energy efficiency – totaling BRL 21.8 billion. Other sectors funded are circular economy (BRL12.9B), bioeconomy (BRL 5.3B), and infrastructure and adaptation to climate change (BRL 4.3B).
*Elaine Patricia Cruz, from São Paulo, contributed to this article.
