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BNDES on the hunt for projects to boost energy transition

More than 52 billion reals: this is the amount planned by the Brazilian Development Bank (BNDES) to finance energy transformation infrastructure projects. By 2023, the institution plans to invest between 45 and R$50 billion to develop the sector.
Luciana Costa, director in charge of the area, points out that the limitation to achieving this goal is not funding, but the lack of adequately developed projects.

Costa calls for proactive intervention by BNDES toward a sector weighed down by the country‘s instabilities and the uncertainties associated with long-term projects. For this reason, the new management aims to place the focus on projects with advanced structuring so that they can be approved more quickly.

BNDES is hoping for the favorable impact of “green bonds”, launched by the National Treasury, to increase financing for the energy transition sector. The Brazilian government plans to allocate $2 billion to the Climate Fund through its inaugural sustainable sovereign bond issuance.

The Climate Fund, under the management of BNDES, is set to provide funding for initiatives aimed at mitigating climate change. Anticipated outcomes include the issuance of new Treasury bonds with reduced interest rates and their potential pairing with the long-term rate (TLP) to facilitate more affordable credit and promote various projects.

The willingness to propel the transition is evidenced by the agreement signed by BNDES with the oil company Petrobas last June. The agreement provides for technical cooperation focusing on energy transition, research, scientific development and reindustrialization. However, achieving these goals will require cooperation from the various entities involved, starting with the Central Bank, which currently limits the amount that BNDES, holder of 7.9 percent of Petrobas’ shares, can invest in the company.


Read also: Brazil: unveiling the power of hydropower and beyond
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