Mitigation of Climate Change and Environmental
Sustainability: The Role of Development Banks in both
dimensions
Bogotá - N...
1. Brazil
2. BNDES
3. Environmental division
4. Environmental Policies and Studies Department
5. Green Financing Departmen...
Source: IBGE, 2009
Energy Supply Breakdown
• 46% renewable sources
• World average: 13%
• Developed countries average: 6%
...
• Successful management of the crisis
• Brazil has resumed growth trend at 5% a year on average on
the next 5 years...
Bra...
• Investment and savings to strengthen economic
growth
• Infrastructure
• Education
• Social mobility / income distributio...
AGENDA
1. Brazil
2. BNDES
3. Environmental division
4. Environmental Policies and Studies Department
5. Green Financing De...
• Established in 1952
• Main provider of long-term
financing in Brazil
• Brazilian Export Bank
• 100% state-owned company
...
Today: Growing demand for a broad and active approach
Evolution of environmental approach
• BNDES’ first environmental uni...
AGENDA
1. Brazil
2. BNDES
3. Environmental division
4. Environmental Policies and Studies Department
5. Green Financing De...
Drafting of
environmental policies
and provision of
technical support during
all phases of project
analysis;
Innovation an...
AGENDA
1. Brazil
2. BNDES
3. Environmental division
4. Environmental Policies and Studies Department
5. Green Financing De...
Environmental Policies and Studies
• BNDES participation in the discussion and implementation of the Brazilian
environment...
The Atlantic Forest
Atlantic Forest
BNDES Initiative
Smaller than theSmaller than the
Amazon, but similarAmazon, but simil...
AGENDA
1. Brazil
2. BNDES
3. Environmental division
4. Environmental Policies and Studies Department
5. Green Financing De...
Investiments (US$ Million)
Direct Operations
Sectors directly related to the
environment or traditional sectors with
techn...
• Support Program for Energy Efficiency: Support for projects contributing to
the energy economy, raising the global effic...
Green Financing Department
Green Securities and Products
• Carbon Efficient Index (ICO2)
• Exchange-Traded Fund (ETF)
• De...
Recalculation based on GEE emissions
Increased participation (+ 2%)
Increased participation (+ 3%)
Reduced participation (...
AGENDA
1. Brazil
2. BNDES
3. Environmental division
4. Environmental Policies and Studies Department
5. Green Financing De...
The Amazon Fund Department
The world sponsors it. Brazil tends to it. We all win.
The Amazon forest
The Amazon Region
• The largest tropical rainforest on the
planet
• Some 7 million km2
stretched across ...
Some 60% of the
Amazon forest is in
Brazilian territory.
82% still
forested
Brazilian Amazon
in about 30 years
18% of
deforestation
Brazilian Amazon
The Brazilian
government’s original
proposal presented in
Bali, Indonesia, in
Dec/2007, to create
a mechanism to
support e...
• Promoting a consistent and continuous reduction in the rate of
deforestation in Brazil;
• Transforming the reduction of ...
Guideline and Criteria/Determine
factors
Projects must be coherent with:
PAS Sustainable Amazon Plan
PPCDAM
Action Plan fo...
• First donation: Norway
• The Norwegian Government announced that it will provide
the Amazon Fund with US$ 1 billion over...
Approved Projects in 2009
• Projects deal with:
o Protected areas
o Enviromental’s services payments to communities
o Envi...
IMAZON – AMAZON INSTITUTE OF PEOPLE AND
THE ENVIRONMENT
AMAZON FUND US$ 5.5 million
Approved Projects in 2009
TNC – THE NA...
Projects deal with: Institutional Development
Approved Projects in 2010
Alta Floresta Municipality
(Mato Grosso State)
US$...
The Amazon Fund
AGENDA
1. Brazil
2. BNDES
3. Environmental division
4. Environmental Policies and Studies Department
5. Green Financing De...
Conclusion
Thank You!
Claudia Nessi Zonenschain
nessi@bndes.gov.br
www.bndes.gov.br
Conclusion
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1 claudia nessi seminario bogota 18.11.2010 claudia_nessi completo

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Sesión V: El rol de los bancos de desarrollo en la inversión para la mitigación: retos para el “scaling up” del financiamiento

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1 claudia nessi seminario bogota 18.11.2010 claudia_nessi completo

  1. 1. Mitigation of Climate Change and Environmental Sustainability: The Role of Development Banks in both dimensions Bogotá - November 2010 Section V – The role played by development banks: paths to ‘scaling up’ the investment for mitigation
  2. 2. 1. Brazil 2. BNDES 3. Environmental division 4. Environmental Policies and Studies Department 5. Green Financing Department 6. Amazon Fund Department 7. A broad approach AGENDA
  3. 3. Source: IBGE, 2009 Energy Supply Breakdown • 46% renewable sources • World average: 13% • Developed countries average: 6% Natural Resources • Largest tropical forest • One of the largest biodiversity • Largest supply of fresh water • High agricultural productivity/potential Major contribution to face climate change: to avoid deforestation General Features Key Figures Total area 8.5 million km2 Population 192 million GDP (USD) 1.6 trillion Per capita GDP (PPP) (USD) 10,200 ..
  4. 4. • Successful management of the crisis • Brazil has resumed growth trend at 5% a year on average on the next 5 years... Brazil: GDP Annual Growth Rate (%) Economic growth is on! Source:Miinistry of Fiinance Context
  5. 5. • Investment and savings to strengthen economic growth • Infrastructure • Education • Social mobility / income distribution • Innovation and skill capabilities to keep pace with the industrial/technical “green” revolution • New habits and routines related to sustainability awareness: • consumer’s behavior • proactive entrepreneurial strategies NEWCONCEPTION Developing countries might lose significant improvements obtained in recent years and might be subject to new “sustainable” constraints ATTENTION Brazilian challenges ... But Brazil still faces an essential challenge: to evolve from growth to sustainable development
  6. 6. AGENDA 1. Brazil 2. BNDES 3. Environmental division 4. Environmental Policies and Studies Department 5. Green Financing Department 6. Amazon Fund Department 7. A broad approach
  7. 7. • Established in 1952 • Main provider of long-term financing in Brazil • Brazilian Export Bank • 100% state-owned company under private law • 2250 employees • Instruments o Direct & Indirect credit operation o Project finance o Equity investments o Non-refundable credit lines o Guarantee Fund for MSME The role played by BNDES Assets Equity Disbursement World Bank 275.4 40.0 18.6 BNDES 222.0 15.9 72.2 IDB 72.5 19.4 7.1 CAF 14.3 4.6 5.8 Source: BNDES (Dec/09), World Bank (Jun/09), IDB y CAF (Dec/08). (*) World Bank as of June 30th. Non Performing Loans 2009: 0,20 (%) Development Bank Scale and Scope Matters (US$ Billion)
  8. 8. Today: Growing demand for a broad and active approach Evolution of environmental approach • BNDES’ first environmental unit was created in 1989. • Focus: • To develop knowledge • To provide technical support for the operational Areas • To propose the creation of programs and credit lines • To interact with other institutions • Since the 80’s: environmental programs and credit lines • Since the 90’s: environmental procedures
  9. 9. AGENDA 1. Brazil 2. BNDES 3. Environmental division 4. Environmental Policies and Studies Department 5. Green Financing Department 6. Amazon Fund Department 7. A broad approach
  10. 10. Drafting of environmental policies and provision of technical support during all phases of project analysis; Innovation and Native Forests non-refundable financing Development and execution of financial instruments and strategies to encourage sustainable environmental initiatives Verification of adherence to environmental legislation and analysis of the legal aspects of the divisions’ operations Management of the Amazon Fund DEPUTY MANAGEMENT Advisors Advisors Department of Environmental Policies and Studies DEMAM Green Financing Department DEOPE Amazon Fund Department DEFAM Legal Department JUAMA Structure of the Environmental Division
  11. 11. AGENDA 1. Brazil 2. BNDES 3. Environmental division 4. Environmental Policies and Studies Department 5. Green Financing Department 6. Amazon Fund Department 7. A broad approach
  12. 12. Environmental Policies and Studies • BNDES participation in the discussion and implementation of the Brazilian environmental policies • Technical support to the operational areas of BNDES • Technical Training of Employees • Coordination and Preparation of Studies on specific subjects and sectors • Mapping out socioenvironmental best practices • Green Accounting Project • Non-reimbursable funding • Technology Fund – FUNTEC • BNDES Mata Atlântica (Atlantic Forest Iniciative)
  13. 13. The Atlantic Forest Atlantic Forest BNDES Initiative Smaller than theSmaller than the Amazon, but similarAmazon, but similar range of biodiversityrange of biodiversity Originally 330 millionOriginally 330 million acresacres 7% remaining in very7% remaining in very good conservation statusgood conservation status 60% of Brazil’s60% of Brazil’s populationpopulation 80% of the GDP80% of the GDP Source: The Atlantic Forest Restoration Pact Non-refundable financial resources from the BNDES Social Fund, for the reforesting of areas with native species. • 55 proposals • 27 projects selected The Iniciative • Job opportunities • Income, training and education to residents of local communities Creating jobs and developing local economies Atlantic Forest BNDES Initiative Original area Today
  14. 14. AGENDA 1. Brazil 2. BNDES 3. Environmental division 4. Environmental Policies and Studies Department 5. Green Financing Department 6. Amazon Fund Department 7. A broad approach
  15. 15. Investiments (US$ Million) Direct Operations Sectors directly related to the environment or traditional sectors with technological innovations optimizing the consumption of natural resources •Forest assets •Chemical industry •Renewable energies and green technology •Biotechnology •Sanitation and waste Private Equity Funds • CDM Fund • Sanitation and Environment Fund • Forestry Fund • Amazon Productive Activities Fund Green Financing Department Equity 227 828 TOTALBNDES Forestry Sanitation Environment CDM
  16. 16. • Support Program for Energy Efficiency: Support for projects contributing to the energy economy, raising the global efficiency of energy systems or fostering the replacement of fossil fuels with renewable sources. • Environment Line: Support for environmental projects fostering the sustainable development of the country: • sanitation; organization of the use of natural resources; recovery and conservation of the ecosystems and biodiversity; MDL; recovery of environmental damage. • BNDES Florestal: Support for reforesting, conservation and forest recovery of degraded or converted areas, and for the sustainable use of native areas by means of forest management. • Forest Replenishment: Support the regularization of environmental damage in rural properties working with agribusiness, and contribute to the restoration and appreciation of native forests and remaining ecosystems. Green Financing Department Fixed Income
  17. 17. Green Financing Department Green Securities and Products • Carbon Efficient Index (ICO2) • Exchange-Traded Fund (ETF) • Development of market devices to encourage “good” practices in agricultural production (securitization of green receivables) • Development of mechanism to auction expectations to reduce emissions (securitization of carbon credits) • Development of mechanism to finance the production chain of large companies with “good” environmental practices (securitization of sustainable receivables) • Development of a carbon market in Brazil (following the European Emission Trading Scheme)
  18. 18. Recalculation based on GEE emissions Increased participation (+ 2%) Increased participation (+ 3%) Reduced participation (- 3%) Reduced participation (- 2%) 38 % 17 % 13 % 32 % 40 % 14% 16 % 30 % The Carbon Efficient Index Calculated on companies’ Greenhouse gas emissions • Based on Brazilian IBrX-50 stock index • Weight reduction in the index of stocks with the highest [tCO2e emission/R$MM of revenue] for each sector • Companies’ participation is voluntary Green Financing Department “Original’ Index Participation “Carbon Efficient” Index New participation Expected impact •Bring transparency to the market regarding company emissions •Encourage the dissemination and adoption of policies to reduce emissions in companies •Anticipate the competitive environment in a low carbon economy •Create investment opportunities for investors sensitive to environmental issues Previous Situation of IBrX-50 Companies Of companies that report data on emissions (June/2009) Source: Websites, annual reports and sustainability reports.
  19. 19. AGENDA 1. Brazil 2. BNDES 3. Environmental division 4. Environmental Policies and Studies Department 5. Green Financing Department 6. Amazon Fund Department 7. A broad approach
  20. 20. The Amazon Fund Department The world sponsors it. Brazil tends to it. We all win.
  21. 21. The Amazon forest The Amazon Region • The largest tropical rainforest on the planet • Some 7 million km2 stretched across nine countries in South America: • Bolivia • Ecuador • Venezuela • Colombia • Peru • Suriname • Guiana • French Guiana • Brazil
  22. 22. Some 60% of the Amazon forest is in Brazilian territory. 82% still forested Brazilian Amazon
  23. 23. in about 30 years 18% of deforestation Brazilian Amazon
  24. 24. The Brazilian government’s original proposal presented in Bali, Indonesia, in Dec/2007, to create a mechanism to support efforts in reducing deforestation in the Amazon. The Amazon Fund Context and History
  25. 25. • Promoting a consistent and continuous reduction in the rate of deforestation in Brazil; • Transforming the reduction of emissions from deforestation into a system that finances the conservation and sustainable use of forests; • Demonstrating the feasibility of the incentive mechanisms to reduce emissions from deforestation; • and making the forest more valuable than the alternative use of the land. Funds raised are earmarked for non-reimbursable funding for projects aimed at: The Amazon Fund Goals
  26. 26. Guideline and Criteria/Determine factors Projects must be coherent with: PAS Sustainable Amazon Plan PPCDAM Action Plan for Prevention and Control of Deforestation in the Legal Amazon STATE PLANS State Plans to Combat Deforestation COFA Guidelines and Criteria Guidelines and criteria established by the Guidance Committee of the Amazon Fund The BNDES’ Operational Policies BNDES’ Operational Policies for the Amazon Fund
  27. 27. • First donation: Norway • The Norwegian Government announced that it will provide the Amazon Fund with US$ 1 billion over the next four to seven years. o2009: US$ 110MM o2010: US$ 110MM o2011: at least US$ 110MM Fundraising Kickoff
  28. 28. Approved Projects in 2009 • Projects deal with: o Protected areas o Enviromental’s services payments to communities o Enviromental rural producers registrations o Monitoring o Stimulation to sustainable activities o Recover of degraded areas o Familar rural production • Time to implementation varies 3-5 years • Total project’s areas equivalents to Portugal, Denmark, Austria Total of BRL 70,3 million = USD 40,4 million
  29. 29. IMAZON – AMAZON INSTITUTE OF PEOPLE AND THE ENVIRONMENT AMAZON FUND US$ 5.5 million Approved Projects in 2009 TNC – THE NATURE CONSERVANCY (BRAZIL) AMAZON FUND US$ 9.1 million IOV – OURO VERDE INSTITUTE AMAZON FUND US$ 3.1 million ARPA – PROTECTED AMAZON AREAS AMAZON FUND US$ 11.4 million FAS – AMAZONAS SUSTAINABLE FOUNDATION AMAZON FUND US$ 11 million
  30. 30. Projects deal with: Institutional Development Approved Projects in 2010 Alta Floresta Municipality (Mato Grosso State) US$ 1.5 million Amazonas State US$ 11.4 million Pará State Environment Unit US$ 9 million Total of BRL 39,0 million = USD 22,4 million
  31. 31. The Amazon Fund
  32. 32. AGENDA 1. Brazil 2. BNDES 3. Environmental division 4. Environmental Policies and Studies Department 5. Green Financing Department 6. Amazon Fund Department 7. A broad approach
  33. 33. Conclusion
  34. 34. Thank You! Claudia Nessi Zonenschain nessi@bndes.gov.br www.bndes.gov.br Conclusion
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