Oct 24, 2020

 Economic development and sustainability are becoming increasingly aligned, according to the participants of the last day of the BNDES Green Week. During the Renewable Energies and Green Cities panels, held virtually on Friday (23) and streamed on BNDES YouTube channel, the discussions showed that Brazil has solutions to foster development that can mitigate the harmful environmental effects of economic activity.

The BNDES’s director of Credit and Guarantee, Petrônio Cançado, who moderated the Renewable Energies panel, emphasized that although Brazil already has a green energy matrix, several challenges remain to be overcome to increase the participation of sustainable sources and guarantee energy security throughout the national territory. “A country that wants to be sustainable needs sustainable energy. Investing in new technologies is a challenge and it is important to develop products and mechanisms capable of meeting this financing need,” he said.

The president of the Energy Research Office (EPE), Thiago Barral, pointed out that the sector no longer has a single centralized business model based on long-term auctions. With the expansion of the free energy market and the increased competitiveness of renewable sources, the “menu” offered to the market has also expanded. "We are experiencing an expansion of the free market, and, above all, a time when new financial products, new business models and new arrangements for making energy infrastructure investments feasible are emerging," he argued.

For Barral, financial instruments have the challenge of innovating, while taking into account these new opportunities, learning to assess the risks of these new projects and understanding how the various energy technologies combine. "There is no single model and this is a challenge for financing instruments," he said.

"BNDES plays a fundamental leading role in financing this green economy and has to innovate in its instruments," argued Ítalo Freitas, the CEO of AES Tietê. He considers the energy sector as one of the major inputs to industry and commerce: “To make a country competitive, I think that energy has to be competitive,” he affirmed.

Enel's Director of Strategy, Rosana Santos, observes that the challenge presented by the energy transition towards greater sustainability goes beyond cleaning the energy matrix and should involve the entire sector. "The energy transition reaches the client units," she declared.

She also emphasized the importance of financing models that account for the benefits generated by the energy transition and gave as an example wind projects, which boost the local economy in many regions of the Brazilian Northeast, due to the payment of land leases for the installation of wind turbines.

Green Cities – Pedro Bruno Barros de Souza, the moderator of the second panel of the day and the superintendent of BNDES’s Government and Institutional Relations Division, underscored the relevance of three areas of the Bank's activities related to the improvement of urban environments: city parks, public lighting and sanitation. “These are themes that are fully aligned with our strategy when we talk about a service bank, that is, BNDES at the service of improving infrastructure in Brazil with a focus on sustainability.”

Souza explained that green cities are an agenda closely linked to the BNDES’s institutional mission. In this sense, he stated that it is very important to develop new solutions, such as the issuance this week of R$ 1 billion in Green Bonds (aimed at raising funds to be invested in projects generating positive social and environmental impacts).

Asked about their views on the concept of smart cities, all participants highlighted, in addition to environmental aspects, the importance of social inclusion. “In Brazil, the most vulnerable to climatic events are, in most cases, the poorest who live on the outskirts of large cities,” said Marcos Thadeu Albicalil, from the New Development Bank (NDB), who considers reducing inequality as the first step for the future planning of cities.

The coordinator of the Public Lighting Committee of the Brazilian Association of Infrastructure and Basic Industries (ABDIB), Miguel Noronha, highlighted the benefits of public-private partnership (PPP) projects in the sector, pointing to the case of Belo Horizonte’s PPP, which was structured by the BNDES. According to Noronha, with the widespread adoption of LED lighting, the luminous flux increased four or five times, generating positive impacts even on public safety. In addition, he informed that the initiative reduced electricity consumption by more than 55% – benefiting the city, which is saving R$ 30 million per year, and the environment, due to both the lower volume of energy used in the system and the extended durability of LED lamps, which also minimizes lamp disposal problems.

“I could never imagine that the BNDES, which used to focus only on large projects in the past, would go to medium-sized cities and put all its capacity to carry out project modeling,” declared Noronha, recognizing these initiatives as transformative actions for the municipalities involved.

Marcelo Skaf, the CEO of M. Skaf Ambiental, mentioned urban parks as also important for promoting green cities. For Skaf, this period of lockdown caused by the Covid-19 pandemic made people more aware of the direct relationship between these urban spaces and the promotion of quality of life.

“In Brazil, we have an abundance of environmental assets and, for this reason, the country can and must play a leading role (in disseminating a sustainability agenda),” declared Skaf.

He considers the partnership between the public and private sectors a solution to the limitations of government action, which, in his view, should focus on health, security and education. "Fostering partnership between private and public sectors, regardless of the management arrangement, is a successful tool because society wins and we lift the burden on the State, which can concentrate resources and energies on structuring areas," he said during the last panel of the week.

BNDES Green Week – Held from October 19 to 23, BNDES Green Week promoted discussions on topics such as green finance, the Amazon, best environmental, social and governance practices (ESG) and sustainable infrastructure. Green Week activities were broadcasted over the internet and the contents are available in its entirety on the BNDES YouTube channel (www.youtube.com/bndes).