Brazilian Ministry Of Environment And National Development Bank launch credit line for projects to reduce carbon emissions
Brazil’s Minister of Environment Izabella Teixeira and Brazilian National Development Bank (BNDES) President Luciano Coutinho announced the launch of a new credit line to support projects focused on greenhouse gas reduction and climate change solutions.
Established under Brazil’s National Climate Change Fund, the new financing instrument aims to encourage private, municipal and state investments that support the objectives set by Brazil’s National Policy on Climate Change in 2009, including reducing greenhouse gas emissions, reducing vulnerability to the adverse effects of climate change, and preparing to compete in a low-carbon economy.
As mandated upon its establishment in 2009, 60% of the National Climate Change Fund comes from national oil exploration revenues that are deposited into a special account held by the Ministry of Environment. These resources are split into two categories: reimbursable, which are managed by BNDES; and non-reimbursable, managed by the Ministry of Environment.
In 2011, approximately R$230 million (US$133.7 million) was set aside for the two categories. Of this total, approximately R$30 million (US$17.4 million) was allocated to the non-reimbursable category and put into effect in 2011. The remaining R$200 million (US$116.2) was put in the reimbursable category, and will become effective with today’s launch of the credit line. This category is expected to receive a total of R$360 million (US$209.3 million) in 2012.
BNDES has offered its lowest interest rates ever for the new credit line, starting from 2.5% per annum, depending on which sub-program category the investment support. The program’s loan terms vary and can reach up to 25 years—the maximum term permitted for urban railway transport investment projects. BNDES will help fund up to 90% of the projects in the eligible sub-programs.
These sub-programs include:
Efficient transportation models. Projects that contribute to the reduction of greenhouse gases and local pollutants caused by urban transportation, as well as urban mobility enhancements in metropolitan regions.
Efficient machinery and equipment. Projects that produce new machinery and equipment with higher energy efficiency.
Renewable energy. Projects that facilitate sustainable energy generation through wind power, biomass, ocean and solar radiation; as well as technological innovation and production chains within these sectors.
Waste with energy potential. Projects that focus on urban cleaning and the use of waste deposits to generate energy in metropolitan regions, including cities that will host the 2014 FIFA World Cup.
Vegetal charcoal. Projects that improve energy efficiency through the production of vegetal charcoal.
Combating desertification. Projects that restore biomes and develop sustainable production activities that involve timber, fiber and fruits in Brazil’s Northeast region.