Banco do Brazil [BBAS3:BZ], a Brazilian state-run bank, has entered into a memorandum of understanding (MoU) with the World Bank to provide a USD400m credit line for sustainable agriculture and the restoration of degraded areas in the Amazon region, as reported by Reuters on September 19. Under the terms of the MoU, both banks will collaborate on exploring sustainable solutions for various aspects of the Brazilian bioeconomy. This includes efforts related to forest and land restoration, as well as the promotion of sustainable, low-carbon agriculture practices. The overarching goal of these initiatives is to support Brazil’s national plan to combat deforestation in the Amazon and to further its environmental objectives.
The agreement represents is an extension of a previous partnership between Banco do Brazil and the World Bank.. In this earlier collaboration, the World Bank provided USD400m to Banco do Brazil, enabling the bank to offer sustainability-related loans to companies that are actively working to reduce carbon emissions. This partnership, launched in 2022, also included the establishment of a pilot Climate Debt Fund worth USD98m. The fund’s purpose is to mobilize private capital for the expansion of sustainability-linked finance within the broader economy. These joint efforts with the World Bank are part of Brazil’s broader strategy to diversify its sources of funding for environmental projects and social initiatives. In August, Brazil announced plans to issue its inaugural sustainable sovereign bond, with a value exceeding USD1bn. The funds raised through this bond issuance will be dedicated to activities aimed at reducing greenhouse gas emissions, mitigating deforestation, and addressing issues related to hunger alleviation.