Brazil is gearing up to issue its inaugural sustainable sovereign bonds in September, with a value estimated to be around USD2bn, as reported by Reuters on August 24. The issuance of these bonds is intended to provide funding for the country’s ecological transition plan. The bonds will primarily support the Climate Fund, managed by the Brazilian Development Bank (BNDES), which will allocate funds to support various initiatives related to climate change mitigation and adaptation.

Brazil aims to attract private investment to finance its green transition plan through the issuance of sustainable sovereign bonds. This follows the footsteps of neighboring countries like Chile, Uruguay, and Mexico, which have already introduced their own sovereign sustainability-linked bonds. The Brazilian government has also engaged in discussions with other countries such as Mexico, Germany, Colombia, and Chile to establish a framework for issuing environmental, social, and governance (ESG) bonds. Investors are showing interest in Brazil’s potential to establish a robust green bond market, given the country’s unique environmental assets, including the Amazon rainforest’s role in global weather systems and oxygen production, its rich biodiversity, and its diverse indigenous communities. The issuance of sustainable sovereign bonds is expected to contribute to Brazil’s efforts in transitioning to a more sustainable and climate-resilient economy.

Sources:

https://www.reuters.com/sustainability/sustainable-finance-reporting/brazil-aims-raise-2-bln-esg-sovereign-bonds-september-official-2023-08-24/

https://www.reuters.com/business/sustainable-business/brazil-held-talks-with-mexico-chile-germany-over-green-bond-project-2023-02-10/

https://www.ifre.com/story/3727062/brazil-to-boost-em-sovereign-green-bonds-qgmpzcv417