Brazilian ministry of environment and BNDES launch carbon reduction credit line
The Brazilian ministry of environment and Brazilian Development Bank have launched a new credit line supporting projects focused on greenhouse gas reduction and climate change solutions.
It was established under the National Climate Change Fund, and aims to encourage private, municipal, and state investments to support objectives set by Brazil’s National Policy on Climate Change in 2009. These include reducing greenhouse gas emissions, reducing vulnerability to the adverse effects of climate change, and preparing to compete in a low-carbon economy.
‘The Climate Fund is one of the main instruments in Brazil’s climate change policy,’ says Minister of Environment Minister Teixeira. ‘By 2014 it has the potential to provide up to R$ 1 billion (€0.44 billion) in financing to support Brazil’s national commitment to reducing greenhouse gas emissions.’
60% of the National Climate Change Fund comes from national oil exploration revenues. These are then deposited into a special account held by the Ministry of Environment. The resources are split into two categories: reimbursable and non-reimbursable, managed by the BNDES and the Ministry of Environment respectively.
In 2011, approximately R$ 230 million (101.28 million) was set aside for the two categories. From this, approximately R$ 30 million (13.21 million) went to the non-reimbursable category. The rest to the reimbursable category and will become effective with the launch of the credit line.
BNDES has offered its lowest interest rates ever for the new credit line, starting from 2.5% p/a, depending on which sub-program category the investment support. BNDES will help fund up to 90% of the projects in the eligible sub-programs which include: efficient transportation models, efficient machinery and equipment, renewable energy, waste with energy potential, vegetal charcoal and combating desertification.