Brazil launches new investment platform for climate projects

Brazil has launched an investment platform to attract more money for domestic climate solutions — one that will start by mobilizing $10.8 billion of international financing for projects across the nation. “Mitigating is not enough. Adapting is not enough,” said Marina Silva, Brazil’s minister of the environment and climate change, at the platform’s launch event in Washington, D.C. last week. “We need to change the development model.” The Brazil Climate and Ecological Transformation Investment Platform, or BIP, aims to connect projects that can push Brazil’s climate transition plans forward. The country is attempting to cut its emissions in half by the end of the decade — an ambition that’s been amplified by Brazil’s Group of 20 major economies presidency this year. But with emerging economies like Brazil attracting just 14% of the world’s climate finance, the government hopes BIP can unlock previously unattainable flows of international cash — with the focus on scaling projects related to renewable energy, decarbonization, and nature-based solutions. “The key goal here is to support the transition plans that the government has announced,” said Ben Weisman, executive director of capital mobilization at the Glasgow Financial Alliance for Net Zero, or GFANZ, which will help bring international finance institutions to the BIP table. “And so, really identifying: Does a project align with those plans? What are the kinds of emissions reductions that we can expect to see from those projects? And then, we’ll match those projects — at whatever stage they may be in — with potential financiers.” While GFANZ is a partner in the effort, BIP will be led by Brazil’s government. Its secretariat will be hosted by the Brazilian Development Bank, and its operations will be funded by Bloomberg Philanthropies and the Green Climate Fund. BIP has already selected seven “pilot projects” to begin seeking money for, the largest of which are focused on renewable fuels. The projects will range in both size and stage, and each venture will be looking for a different type of investment, depending on the fit, Weisman explained — such as debt, equity, or loans from multilateral development banks. “At the end of the day, it’s still going to be the individual investors and financial institutions and project owners who are the ones making these decisions — not the platform,” he added. “The platform just brings the right folks to the table.” The first projects seeking investment include those led by Acelen Renewables, a Brazilian energy company seeking $3 billion to turn macaúba — a Brazilian palm tree — into green diesel and sustainable aviation fuel; and Australian mining company Fortescue, which hopes to secure $3.5 billion for a green hydrogen plant. Other projects center on decarbonizing the steel industry, developing low-emission extraction methods for rare earth elements, and the creation of Brazil’s first industrial-scale green fertilizer plant. “This is just the starting place for projects that are already seeking investments, and are in line for the government’s transition plan across the sectors,” Weisman said. “In an ideal world, we would have a regular flow or cadence of projects being shown to the financial institutions interested in those sectors and sub-sectors. That’s going to be critical. The idea here is that it’s not just a one-off thing.” As the Group of 20’s current president — and next year’s host of the United Nations Climate Change Conference — Brazil has become a central player on the climate stage. Alongside the country’s aim of reducing emissions by 53% by 2030, Brazil is also attempting to become the first G20 nation to reach net-zero. And while Brazil still receives an “insufficient” rating from the Climate Action Tracker, a project that assesses government progress against the Paris Climate Agreement, Brazil’s deforestation rates did drop by 36% from 2022 to 2023 — an improvement that according to the tracker, was due to strengthened law enforcement. The Brazilians see BIP as the result of those efforts, and the platform as a way to push those ambitions forward in the months to come. “We do have a path … a Brazilian laboratory, if you will,” said Fernando Haddad, Brazil's minister of finance, at the BIP’s launch event. “We’re testing instruments … and all of this will converge into an investment platform.”