Brazil builds on G20 finance reform while advancing domestic investment

Brazil is advancing efforts on two fronts — leading global discussions on multilateral bank and climate finance reform through the G20, while developing new instruments at home to mobilize private capital for its ecological transformation, according to the country’s deputy secretary for sustainable finance, Ivan Oliveira. Under Brazil’s presidency of the Group of 20 leading economies last year, leaders agreed on a plan to make institutions such as the World Bank “better, bigger, and more effective” through a set of concrete reforms. “In the international finance architecture working group, we’ve been pushing the banks to monitor how they’re evolving when it comes to the reforms that were approved last year,” Oliveira said at a Devex Impact House event on the sidelines of the World Bank-International Monetary Fund annual meetings earlier this month. Within the G20’s sustainable finance working group, members are tracking reforms to make global climate funds more efficient and better aligned with countries’ priorities. Oliveira said the group has been working closely with the heads of major funds to improve access to concessional finance and ensure resources are directed toward national programs and plans. He noted that South Africa, which took over the G20 presidency from Brazil, has maintained momentum on reform efforts. “We had a very successful South African presidency that built upon the previous ones, including the Brazilian one, and we’re really keen to work with the U.S. next year,” he said. And on the domestic front, Brazil’s finance ministry is pursuing fiscal and financial reforms to attract more private and international investment. “There’s a whole new tax system coming up in Brazil that’s going to, I think, bring a lot of efficiency to the process and create jobs and really boost productivity in the country,” Oliveira said. “Now we’re working with the income tax reform, but that’s very strategic to really take Brazil as a country that would be even readier to get money from abroad to help us finance transition.” To complement those reforms, the government has introduced new financial instruments to blend public and private capital. The “Eco Invest” initiative allows the Treasury to co-invest with private banks in strategic sectors. “We have launched a whole new initiative from the Treasury, where essentially we have a blended finance line that the Treasury is bringing to the private sector in auctions,” he said. “The Treasury can invest up to 15% in those projects with very low interest rates — in fact, it’s 1% a year in our currency.” Another mechanism, the Brazil Climate and Ecological Transformation Investment Platform, consolidates projects and equity funds aligned with Brazil’s ecological transformation, industrial, and energy transition plans. It will channel concessional finance from the Green Climate Fund and Climate Investment Funds “to boost private sector mobilization in sectors and subsectors that are critical for the plans that we have set during this administration,” Oliveira said. “These are innovative instruments that connect domestic resource mobilization with international finance,” he said.