Brazil's BNDES mulls expanding US$2bn line f... - BNamericas English
Brazil's BNDES mulls expanding US$2bn line for climate change-related projects - BNamericas
Brazil's BNDES mulls expanding US$2bn line for climate change-related projects
Bnamericas Published: Friday, May 24, 2024
Brazil’s federal development bank BNDES is looking at expanding financing lines to encourage projects that mitigate climate change.
The Fundo Clima, or Climate Fund, was created at the start of this year and currently has 10.4bn reais (US$2bn) available to finance solar and wind power projects, among others initiatives, and there are plans to increase the amount.
“We have growing demand in this area. We will perhaps also expand this line, because the demand is already three times greater than what we have, just in the [first] four months of the fund,” BNDES president Aloizio Mercadante said during a presentation to the industries association of Rio de Janeiro state, Firjan.
The funding is attractive as interest rates are lower than the Selic benchmark, which is currently at 10.5%.
“We have the Climate Fund at BNDES, with 10.4bn reais, with a fixed interest rate of 6.15%. For wind and solar, 8%, and for forestry[projects], 1%. So please come up with good projects," Mercadante told the industry leaders.
Initiatives related to mitigation of climate change will tend to gain scale in Brazil as extreme climate events cause significant damage.
Rio Grande do Sul state has been experiencing weeks of heavy rains and persistent flooding.
This has forced the federal authorities to help the state and this week the government provided another line of credit of 1.8bn reais for reconstruction.
So far, the federal government has made 62.5bn reais available in credit lines to rebuild the state's infrastructure and in aid for the people affected.
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