With the growing global demand for investments aligned with the climate transition and sustainable development, Brazil has emerged as one of the leading prospects among emerging markets. Boasting a clean energy matrix, unparalleled biodiversity, and a constantly evolving array of financial instruments, the country offers a favorable ecosystem for expanding green finance.
To better understand Brazil’s current landscape and prospects for green financing, Roberto Vianna, partner in the Banking & Finance practice at Vieira Rezende, shared his insights on the available tools, the most promising sectors, and the competitive advantages that position Brazil as a strategic hub for international investors, particularly in a year marked by the country’s hosting of the Climate Conference (COP30) in the Amazon.
Today, Brazil is emerging as a leader in the sustainable economy. The country has stood out as a prime destination for green financing, driven by a rare combination of factors, including immense biodiversity, a mature and robust credit market, and a predominantly clean energy matrix. A wide range of financial instruments is available to support investments in sustainable projects. BNDES, Brazil’s largest long-term financier in this area, offers dedicated credit lines for green initiatives featuring differentiated financing conditions. It is also essential to highlight the National Fund on Climate Change (commonly called the "Climate Fund"), which supports projects with an environmental focus. The Fund is managed by the Ministry of Environment and Climate Change (MMA), with technical support from BNDES, which operates the Fund’s reimbursable credit line in partnership with public banks such as Banco do Brasil and Caixa Econômica Federal and, since 2022, with private banks as well.
Among capital market instruments, incentivized bonds offer tax benefits to investors in projects designated as priorities by the federal government, particularly those related to energy transition, such as solar and wind power developments. Green bonds – debt instruments requiring external sustainability certification – also represent an available option, although their use has been limited. The additional cost of obtaining certification has not always translated into clear benefits for issuers.
Other forms of financing, such as blended finance structures (which combine philanthropic and commercial capital) and credit solutions via cooperatives, have been gaining ground, particularly among small and medium-sized enterprises. A notable example is the EcoInvest program under Brazil’s Ecological Transformation Plan, which is currently being implemented following its first auction.
Renewable energy and agribusiness are undoubtedly the two main pillars of sustainable investment in Brazil. The energy sector benefits from a predominantly clean matrix, mainly due to the country’s significant hydroelectric production. However, relying only on hydropower is not ideal. In recent years, there has been substantial growth in investments in other energy sources, particularly solar and wind power. Brazil has also recently approved regulatory frameworks for offshore wind and green hydrogen to further develop the sector. The country is solidifying its position as a key player in the global energy transition.
In agribusiness, there is a growing shift toward adopting sustainable practices, such as regenerative agriculture and reforestation. These initiatives contribute to reducing carbon emissions and promote more efficient land use. It is important to note that deforestation, particularly linked to livestock activities, remains the leading source of emissions in Brazil, and the market is increasingly mobilizing to address this issue, especially in light of the country’s decarbonization commitments.
Beyond these sectors, urban mobility is also evolving, with a focus on public transportation powered by alternative energy sources. Additionally, Brazil’s newly established regulated carbon credit market, is emerging as a promising mechanism to finance conservation initiatives and support the low-carbon economy.
Brazil offers a unique combination of attributes that strategically position it among emerging markets in the green finance sector. The country is home to the planet’s greatest biodiversity and vast natural resources, particularly in the Amazon region, which can be sustainably leveraged to generate both economic and environmental value. This natural wealth creates opportunities to develop innovative financial mechanisms, such as conservation projects with impact-driven returns.
With one of the cleanest energy matrices among major economies and a well-functioning capital market, Brazil already has mature sustainable financing instruments already in place. The country also benefits from the active engagement of public and private banks committed to the green agenda, ensuring both technical and financial support for institutional investors and local entrepreneurs. This solid foundation, coupled with the evolving regulations and growing international, makes Brazil a strategic choice for high-impact investments.
Brazil’s role will gain further visibility in November, when it hosts COP30 in the Amazon. The conference will deepen engagement with investors and foreign governments while drawing international attention to key issues such as combating deforestation and protecting Indigenous rights. For the green finance market, hosting COP30 in the heart of the Amazon reinforces Brazil’s image as a vital player in the global transition to a low-carbon economy.
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Brazil's dynamic political and economic environment offers diverse opportunities. Expert guidance is essential to navigate these complexities. This selection of articles highlights why Brazil is an attractive destination for international investment.
