Major Funding Boost for Brazil’s Climate Fund with โขOver R$10.6 Billionโฃ Investment
Bethlehem – Brazil’s Climate Fund, a key government mechanism for financing decarbonization and climate change adaptationโฃ projects, has received a โsignificant injection of R$10.6โข billion in fundingโค from european and Inter-American development banks. The fund is administered by Brazil’s National Bank for Economic and Social Development โ(BNDES) โขandโค coordinated by the Ministry of the Environment.
Leading the investment are โthree European financial institutions: Germany’s KfW, Italy’s CDP, and France’s โdevelopment agency, AFD, contributing a combined โR$7.89 billion towards climate transition projects. The Inter-American Development Bank (IDB) has โขalso signaled its commitment, signing a letter of intent to facilitate a loan of R$2.67 billion (US$500โค million), โpending technical review.
The declaration,made during the COP30 climate conference,was hailed by BNDES president Aloizio Mercadante as aโ positive step towards a low-carbon economy. “The captures signal thatโ we are on the โright path towards aโข low-carbon economy,” Mercadante stated, emphasizing the strengthened cooperationโข between Brazil and the European Union.
This influx of funding represents a 29%โข increase to the โขClimate Fund’s โฃbudget over the past five โyears. Between 2020 and 2025, the fund willโค have access to R$36.3 billionโข in authorized and disbursed financing, according to data from Brazil’s Integrated Planning and Budget System (Siop) compiled by the Talanoa Institute.
BNDES planning director, Nelson Barbosa, clarifiedโข that the Treasury will assume theโค exchange rate risk associated with the foreignโค investments, making the fund more attractive to international lenders. “The Treasury takesโ international resources and passes them on to โthe BNDESโฃ in reais. In other words, โขthe borrower will have a lower fixed interest rate inโข reais,” he explained.
The Climate Fund is a primary financier of BNDES Florestas, a program focused โon developing Brazil’s forest restoration and โขbioeconomy sectors. Recent examples of its impact include R$80 million disbursementsโ to startupsโฃ Mombak and Re.green, backed by guarantees from santander and Bradesco respectively.
BNDES has also secured directโฃ agreements with KfW, totaling R$1.7 billion โ(280โ million euros), to support projects in urban mobility and renewableโค energy. Christiane Laibach, an executive on KfW’s โboard responsible for international investments, highlighted Brazil’s dual commitment to both environmental sustainability and โeconomic development.
AFD โand CDP have a proven track record of collaboration in areas such as urban mobility, sanitation, andโ enduring infrastructure.
Rรฉmy Rioux,โฃ executiveโฃ director of AFD, โnoted a shift in the global landscape, stating, “Today, Europe remains steadfast in its approach to achieving sustainable development. And I think this โขshared vision is what drives us towards a world that, โlet’s โคsay, is no longer governed by multilateralism.”
