Sep 27, 2018

The bank launched a permanent line to finance equipment: the Finame Renewable Energy line, with an initial R$ 2 billion allocation 

The Climate Fund receives a new R$ 228 million contribution

The Brazilian Development Bank (BNDES) has launched a permanent line to support investments in renewable energy, the BNDES Finame Renewable Energy line, with an initial R$ 2 billion allocation. As a complement, the Climate Fund Program – Efficient Machinery and Equipment Line also received a R$ 228 million contribution for new financing.

With the BNDES Finame Renewable Energy line, customers — condominiums, businesses, cooperatives, rural producers and individuals —, together with private, public banks and funding agencies, can finance up to 100% of the total to be applied on equipment, payment periods being up to 120 months and grace periods up to 24 months. The line is already in operation to fund equipment such as solar power generation systems with up to 375 KW, wind power systems with up to 100 KW and water heating through solar collection panels.

The financing can be corrected by TLP, Selic or BNDES’s Fixed Rate, TFB only being applicable to micro, small and medium-sized enterprises (MSME). The final cost includes BNDES’s remuneration — 1.05% per year — as well as the financial agent’s. Considering the average spread of BNDES Finame’s financial agents, the final rate is approximately 1.3% per month for MSMEs. From the sending of the proposal by the financial agent, the approval of the operation is done in a few seconds through the BNDES Online platform. 

The equipment to be financed should be in accordance with BNDES’s standards, which require that they be new, national and meet local-content requirements. This demand aims to strengthen the Brazilian industry, work force and services; to promote the strengthening of the Brazilian production chain; and to facilitate the dissemination and incorporation of technical knowledge by the supply chain and its links. 

In addition to contributing to the environment, as the energy generated is clean, consumers may reduce their spending on electricity bills and, depending on the region, exchange the surplus for credits to be used in the future. Distributed generation reduces the risk of interruption of power supply, since the multiplication of generation points provides greater safety to the system.

Climate Fund – Finame Renewable Energy is BNDES’s second recent initiative to encourage investment in clean energy. In June, the Climate Fund Program – Efficient Machinery and Equipment Line was launched to finance investments in photovoltaic systems, allowing access to individuals. The result was successful: about R$ 80 million in funding approved in less than two months. 

Now, the new R$ 228 million contribution will allow the reopening of the Climate Fund for funding requests. In addition to photovoltaic systems, the line can finance small wind turbines, biogas energy generators and frequency inverters. The Climate Fund’s financing should be carried out with public banks, and the interest rate is up to 4.5% per year, with the maximum term being up to 12 years. 

History – The Climate Fund, established by Law 12,114/2009, is one of the Climate Change National Policy’s instruments, and its goal is to finance climate change mitigation projects, using technologies that still need encouragement for their diffusion. In this way, the Climate Fund aligns itself to the Brazilian commitment, within the framework of the Paris Agreement, of reducing greenhouse gas emissions by 37% by 2025.

BNDES is the Financial Agent of the refundable part and member of the Fund’s Management Committee, made up of ministries, industry, academia and civil society. The current portfolio has approximately R$ 580 million in projects, more than R$ 430 million having already been approved by BNDES, which leveraged more than R$ 1 billion in financing to reduce greenhouse gas emissions. It is estimated that these investments should reduce the emission of greenhouse gases by about 4 million tons of CO2 equivalent.