Ministry of the Environment and the Brazilian Development Bank launch line of credit for projects to reduce emissions

27/02/2012 - 11:55
The aim of the new Fund is to provide support for projects related to efforts aimed at reducing greenhouse gas emissions and in adapting to climate change

Photo: BNDES#Izabella Teixeira and Luciano CoutinhoThe Minister of the Environment, Izabella Teixeira, and the president of the the Brazilian Development Bank (BNDES), Luciano Coutinho, launched the lines of credit for the Climate Fund Program. The aim of the new Fund is to provide support for projects related to efforts aimed at reducing greenhouse gas emissions and in adapting to climate change.

“The Climate Fund is one of the main instruments in Brazilian climate change policy, and up to 2014 these resources may reach R$ 1 billion,” states Teixeira.

The resources form the National Climate Change Fund – the Climate Fund – come from the 60% portion of the Special Participation of Oil, received by the Ministry of the Environment (MMA). Such resources are split into two modalities: reimbursable, which will be operated by the BNDES, and non-reimbursable, which is to be directly managed by the MMA.

In 2011, some R$ 230 million was earmarked for the two modalities. Of this amount, some R$ 30 million was for non-reimbursable, which became effective last year, and R$ 200 million for the reimbursable modality, which will be made available as of now, with the launch of the credit line. For 2012, the reimbursable portion will total R$ 360 million.

The new line, aimed at encouraging private, municipal and state investments, deemed more efficient in terms of the climate, has more attractive interest rates than those currently applied by the BNDES. The new rates vary according to the sub-programs, starting at 2.5% p.a.

Terms of loans, also variable depending on the application, can reach up to 25 years — the maximum term for undertakings in urban railway transport. The participation of the BNDES may be as high as 90% of the eligible items in all the sub-programs.

The sub-programs include:

Efficient transport modals – Aimed at projects that contribute to reducing greenhouse gas emissions and local pollutants in collective urban passenger transport, as well as improvements in urban mobility in metropolitan regions.

Efficient machinery and equipment – Financing for new and nationally-produced machinery and equipment with higher energy efficiency.

Renewable energy – Aimed at energy generation using wind power in isolated systems, using biomass, from oceans and solar radiation, besides technological development projects and the production chains within these sectors.

Waste with energy potential – Support for projects that structure urban cleaning and waste deposits to generate energy in cities that are to host the 2014 World Cup or in metropolitan regions.

Vegetal charcoal – Earmarked for investments aimed at improving energy efficiency in the production of vegetal charcoal.

Combating desertification – Projects for restoring biomes and sustainable production activities involving native timber, fiber and fruits in the Northeast region.

With the launch of the Climate Fund Program, the Ministry of the Environment and the BNDES seek to encourage relevant investments so that Brazil may reach its targets in terms of reducing greenhouse gas emissions –established in the National Policy on Climate Change —, reduce its vulnerability to adverse effects of climate change, and prepare to compete in a low-carbon economy.

Source: BNDES

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