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US-Brazil investor group picks three financial instruments that can drive funds for climate action

February 9, 2017

Rio de Janeiro, February 9, 2017 — Brazil aims to reduce emissions by 37% by 2025, mostly through changes in its land use and energy sectors. Like in many emerging economies, however, funding to meet these targets remains a challenge. This week, a group of public and private investors met for the first time in Rio de Janeiro to tackle this issue.

The group, assembled by the Global Innovation Lab for Climate Finance, included institutions like Caixa, Santander, BNDES, the International Finance Corporation, the Climate Investment Funds, FEBRABAN, the Global Environmental Fund, the Brazilian Ministry of Finance, and the United States Trade and Development Agency, among others.

Dr. Barbara Buchner, Executive Director of Climate Policy Initiative and head of the Global Lab said, “The Brasil Lab Panel builds on the success of the Global Lab, which has, to-date, helped to raise USD 600 million for renewable energy, energy efficiency, and land use projects around the world. Now, we are looking forward to seeing this group make an impact on scaling up finance for climate action in Brazil.”

In its first phase, the Brasil Lab Panel drew from proposals submitted from all over the world through an open call for ideas, selecting three instruments for further vetting and development. The ideas were selected based on their actionability, innovativeness, potential to catalyze private finance at scale, and ability to support Brazil’s national climate priorities. They are:

  • The Green Receivables Fund: Proposed by Albion Capital and Get2C Brasil, the fund adapts an existing instrument – Fundo de Investimento em Direitos Creditórios (FIDC) – that allows companies to raise capital by securitizing receivables but apply it to green projects.
  • Climate-Smart Cattle Ranching: Proposed by the Nature Conservancy, the initiative aims to increase the supply of deforestation-free beef from the Amazon by developing a prototype business that will implement Embrapa’s Good Agriculture Practices with individual ranchers that register to comply with the Brazilian Forest Code.
  • Distributed Generation for Agriculture Cooperatives in Brazil: Submitted by Renobrax Energias Renováveis, the proposal introduces a project leasing model that allows agricultural cooperatives to finance solar and wind while lowering their electricity costs.

The ideas will next be taken forward for development, with the aim to begin implementation this summer.

For more information about the Global Lab, visit: www.ClimateFinanceLab.org

The Global Innovation Lab for Climate Finance identifies, develops, and pilots transformative climate finance instruments that can drive billions of dollars of private investment in climate change mitigation and adaptation in developing countries. Climate Policy Initiative serves as secretariat and analytical provider for the Lab. The Brasil Lab is one of the initiatives that was initially launched under the auspices of the Brazil-U.S. Climate Change Working Group, led by the Brazilian Ministry of Foreign Affairs and the U.S. Department of State.

CONTACT:

Elysha Davila, Head of Communications, Climate Policy Initiative – elysha.davila@cpisf.org | +1 415 728 3613

Laura Jungman, Analyst, Climate Policy Initiative in Brazil – Laura.Jungman@cpirio.org