EIB to support energy projects in Brazil with €100m funding

The European Investment Bank (EIB) is set to provide €100m to support climate action, renewables and energy efficiency projects in Brazil.

The funds will be allocated to renewable energy projects, such as small-scale solar photovoltaic plants and run-of-the-river hydropower plants, and will contribute to a reduction in CO2 emissions within the country.

The investments are also hoped to increase the country’s renewable and clean energy production capacity, while securing energy supply.

In addition, part of the EIB financing will be dedicated to supporting energy efficiency projects, especially in public buildings, street lighting, and industrial facilities.

The EIB funds, which will go to the public and private investment bank Banco de Desenvolvimento de Minas Gerais (BDMG), are also set to help private companies and municipalities to implement projects promoting renewable energy generation and energy efficiency technologies, with small businesses wishing to improve their environmental footprint also eligible to receive financial backing.

At the signature event that took place in Luxembourg, EIB Vice-President Emma Navarro, responsible for EIB operations in Latin America and for the Bank’s climate action, states that the agreement demonstrates the EIB’s commitment to tackling climate change and its willingness to continue leading the mobilisation of the finance needed for the transition to a low carbon economy worldwide.

“This operation is a perfect example of our priorities in Latin America; promoting sustainable and inclusive economic growth by boosting investments that help to reduce CO2 emissions,” she said.

“We are happy to join forces with Banco de Desenvolvimento de Minas Gerais to achieve these goals and to contribute to the development of clean energy sources in Brazil.”

The EU bank will provide the finance, which will cover up to 75 per cent of the final project investment cost, in the framework of the 2014-2020 lending mandate for Latin America, with the funds covered by the EU guarantee.

The EIB hopes that the investments will contribute to the achievement of the United Nations’ Sustainable Development Goals, which itself aims to secure access to affordable, reliable, sustainable and modern energy while fighting climate change.

The different schemes under this programme will be carried out over the next four years, up to 2023, and their implementation is expected to provide jobs for around 700 people.

Sergio Gusmão Suchodolski, President of BDMG, believes the partnership with the EIB places the state of Minas Gerais on the global map of major investments in sustainability.

“This operation is a strategic opportunity for the diversification of the energy mix in our region,” he said.

“Undoubtedly, having a partner like the EIB, one of the largest multilateral institutions in the world, will strengthen BDMG's role in the growing market for clean and renewable energy. In this context, it is our commitment to promote new business on a sustainable basis, in line with the credit profile available worldwide.”

The EIB has signed renewables and energy efficiency projects worth over €880m in Latin America between 2013 and 2018, with the bank providing €640m in 2018 to finance 15 operations in the region, which is the highest number of EIB operations structured there in one year.

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