To combat climate change in the areas of Sanitation and Solid Waste, BNDES receives R$ 350 million in funding from the Ministry of the Environment

To combat climate change in the areas of Sanitation and Solid Waste, BNDES receives R$ 350 million in funding from the Ministry of the Environment –Climate Fund

Aug 2, 2020

The Brazilian Development Bank (BNDES) is to receive new resources from the Ministry of the Environment – Climate Fund, to the tune of R$ 350 million. Combined with previously received funds, the total investment exceeds R$ 1 billion. This year, the funding will be directed primarily to investments in Sanitation and Solid Waste recovery. Such a strategy is intended to improve the urban population’s quality of life, with a focus on urbanization, environment and sanitary conditions.

The Climate Fund Program is intended to make use of the reimbursable portion of resources controlled by the National Fund on Climate Change. Created by Law 12,114 (12.9.2009) and regulated by Decree 7,343 (10.26.2010), it is currently governed by Decree 10,143 (11.28.2019).The funds are used to support the implementation of projects as well as the acquisition of machinery and equipment, and to drive technological development aimed at reducing greenhouse gas emissions and adapting to climate changes and their effects.

Each project can receive a maximum of R$ 30 million every 12 months. These resources are granted by BNDES according to the BNDES Finame or BNDES Finem models. The Climate Fund has already allocated resources to support the development of Rio de Janeiro’s light rail transit system. Other examples of BNDES-backed projects include power generation technology at the Caeiros Landfill, in São Paulo, and the installation of solar panels for more than 800 individuals and micro companies.

Universal sanitation in Brazil is a BNDES priority. Currently, 100 million people lack sewage collection in their homes, and 35 million do not even have access to treated water. The Bank is currently structuring eight state and municipal concession projects, intended to serve 25 million Brazilians and attract over R$ 55 billion in investments. After the approval of Brazil’s new regulatory framework, additional federative states are expected to hire the Bank.

In terms of social waste treatment, BNDES has an important participation in the financing of: selective or differentiated collection systems, including automated or semi-automated sorting systems; organic waste treatment (except when the residues are destined for energy generation); remediation of areas that have been degraded by inadequate disposal of solid waste, allowing the deposited waste to receive new economic uses.

The Climate Fund Program has nine subprograms: Urban Mobility, Sustainable Cities and Climate Change, Efficient Machines and Equipment, Renewable Energies, Solid Waste, Charcoal, Native Forests, Carbon Management and Services, and Innovative Projects. Every year, its Steering Committee must approve a budget proposal and an Annual Plan for Resource Allocation (PAAR, in the Portuguese acronym). At the end of each year, the committee must also prepare fund allocation reports.

The Climate Fund website provides information on the Bank’s climate change-related operations.