The European Investment Bank (EIB) is providing a EUR 500 million loan to The Brazilian Development Bank (BNDES) of Brazil for projects in the renewable energy sector supporting climate change mitigation.The objective of this operation is to support investments that generate environmental benefits with respect to combating climate change. The majority of the schemes will contribute to reducing greenhouse gas emissions by generating renewable energy. Other schemes may focus on increasing energy efficiency, including in industrial applications, the heating and cooling sectors and in power generation or support investments for climate change adaptation.
The EIB’s Brazil Climate Change Mitigation framework loan will provide financing for small and medium-size investments in the renewable energy and energy efficiency sectors. The framework loan will be made up of a maximum of 25 investments schemes in the following sectors: energy and energy efficiency including small hydropower schemes (less than 30 MW), biogas- or biomass-fired heat and power plants, medium-scale hydroelectric power plants and wind farms, energy efficiency and climate change adaptation investments as well as manufacturing facilities for renewable energy equipment. The schemes will be located in Brazil. Under the eligibility criteria established in the signed loan agreement, BNDES will select from its portfolio the eligible projects and will submit them to EIB following the agreed allocation procedures.
This loan is provided under the EUR 4.5bn Energy Sustainability and Security of Supply Facility (ESF). This will be the first operation structured under the ESF in Brazil and the first Bank operation with BNDES, the Brazilian State development institution, which will on-lend the Bank’s financing to the final beneficiaries.