The National Fund about Climate Change ("Climate Fund") was created by Law no. 12114, of December 9, 2009, and regulated by Decree no. 7343, of October 26, 2010, with the purpose of providing resources to support research and finance projects to mitigate climate change effects and reduce greenhouse gas emissions.
On February 13, 2012, the Brazilian Development Bank ("BNDES") and the Brazilian Ministry of the Environment ("MMA"), to which the Climate Fund is linked, launched the Climate Fund Line of Credit, with the purpose of supporting the implementation of new businesses, the acquisition of equipments and development of technology focused on the reduction of gas emission and adaptation to climate changes and its effects.
The Climate Fund Line of Credit was divided into subprograms: (i) Efficient modals of transportation – For projects that contribute to reducing emissions of greenhouse gases and local pollutants in the public transportation of passengers and improving urban mobility in metropolitan regions; (ii) Efficient machinery and equipment – Financing new and nationally-produced machinery and equipment that benefit from higher energy efficiency levels; (iii) Renewable energy – For investments in generation of energy from wind power in isolated systems, use of biomass, oceans and solar radiation, in addition to projects for development of these sectors' technology and production chain; (iv) Waste with energy potential – Support for projects seeking to rationalize urban cleaning and disposal of waste with generation of energy in the cities hosting the World Cup or their metropolitan regions; (v) Vegetal Charcoal – For investments seeking to improve energy efficiency in the production of vegetal charcoal; and (vi) Anti-desertification projects – Projects seeking to restore biomes or involving sustainable production of native timber, fibers and fruit in the Northeast region.
Interest rates are more attractive than other BNDES facilities and vary in accordance with the relevant subprogram, starting at 2.5 percent per annum. The participation of the BNDES can reach up to 90% of the financed eligible items value and loan terms can go up to 25 years.
The Corporate Finance department of Felsberg and Associados remains at your disposal for any further clarifications.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.