Green Investment Potential Demonstrated In Brazil’s New Economy Event

Next Thursday, Brazil’s transition to a low carbon economy will be on display in London as businesses gather to highlight future green investment opportunities in the world’s 9th largest economy – the biggest in Latin America.

Leaders in banking and finance, sustainable agriculture, forestry and clean energy will be joined by representatives of Brazilian Ministries to showcase investment potential as Brazil begins to implement its NDCs and associated goals in agriculture, land use, clean energy and urban infrastructure. CPFL Renováveis, Ecoagro, Suzano and the national development bank BNDES will be amongst the organisations presenting pipelines.

Brazil is the world’s largest exporter of sugar and soybeans, the 3rd largest exporter of corn, 4th largest producer of fibre furnish. It has the world’s largest area of arable land in a single country. According to the FAO, Brazil will have to increase its food production significantly to help cope with 2050’s world population.

According to the International Finance Corporation (IFC) November 2016 Climate Investment Opportunities in Emerging Markets report, Brazil’s estimated climate smart investment potential for selected sectors is $1.3 trillion from 2016–2030.

Significant opportunities exist to lead in sustainable practices in agribusiness, forestry and paper industries for Brazil. The renewables and energy efficiency sector is well suited to long term green bond funding in support of new infrastructure. Brazil is already the 10th in the world for installed wind capacity.

Recent Developments

In October 2016, major local investors and pension funds signed the first Brazil Green Bonds Statement committing to “the development of a robust Brazilian green bonds market that makes a contribution to addressing climate change.”

A Council for Sustainable Market Development (Conselho Brasileiro para o Desenvolvimento Sustentável do Mercado) has been jointly convened by the Business Council for Sustainable Development (CEBDS) and the Climate Bonds Initiative, to develop and promote policy and market mechanisms to catalyse a robust future pipeline of opportunities for green investments in the future.

On the 28th November, 2016, Suzano Pulp & Paper SA announced the first green bond issued in Brazilian Real, following up on their successful USD 500m green issuance in July.

This is the third green bond from Brazil since food giant BFR led off in May 2015 with a EUR 500m (USD 549m) BBB-rated bond attracting more than 50% European buyers.

Justine Leigh-Bell, Director Market Development, Climate Bonds Initiative:

“The biggest challenge post COP22 is for national policy makers, local market actors and global investors to accelerate the flow of green investment. This ‘Brazil’s New Economy’ showcase is another step in building green capital flows into Brazil via the global green finance hub being established in London.”

“Brazil has been a leader in global climate negotiations and is now looking to low carbon economic development and green growth as part of its NDC commitments. This means expanded investment in sustainable agribusiness, forestry, pulp and paper industries and land use change. Expansion of clean energy and development of urban transport, energy and water infrastructure are other areas of opportunity. “