Capital Markets and Other Financial Instruments

This report analyzes capital markets and financial instruments beyond rural credit used to mobilize private climate finance for the land use sector in Brazil between 2021 and 2023, focusing on thematic bonds, CBIOs, and BNDES operations.

• Of the tracked private climate finance from thematic bonds, CBIOs, and BNDES finance, the bioenergy and biofuels sector was the primary recipient, receiving 54% of the funds, which equates to US$ 1.9 billion per year.
• Thematic bonds mobilized US$ 2.5 billion per year for land use, representing 14% of tracked flows. While the biofuels sector received 44% (US$ 1.1 billion per year) and the forest sector received 37% (US$ 0.9 billion per year), the overall share of land use among thematic bonds in Brazil dropped from 22% (US$ 4.2 billion) in 2021 to 4% (US$ 0.5 billion) in 2023.
• CBIOs, the primary instrument of RENOVABIO, mobilized US$ 600 million per year from 2021 to 2023. The average value per CBIO rose from US$ 8 in 2021 to US$ 22 in 2023, and between 2020 and 2023, these bonds financed the avoidance of 109 million tons of CO2 equivalent.
• BNDES direct and indirect finance operations provided an average of US$ 422 million per year in low-cost climate credit for land use. The biofuel production chain received 67% of these resources, including US$ 100 million per year via the BNDES RENOVABIO line, while the planted forest sector received 30% (US$ 126 million per year). Additionally, the bank's Socio-Environmental Fund provided US$ 17 million per year in grants, with 98% going to the Brazilian Biodiversity Fund (FUNBIO).
• BNDES plays a crosscutting role in climate finance, managing the Amazon Fund (channeling US$ 26 million in 2023) and the Climate Fund (US$ 14 million per year). The bank also launched a Blended Finance pilot in 2022, where the forest bioeconomy sector showed the highest demand at R$ 461 million (US$ 88 million), and recently announced BNDES Forest Credits with R$ 1 billion (US$ 200 million) for native forests.

APA

Climate Policy Initiative (2024). Capital Markets and Other Financial Instruments. https://www.climatepolicyinitiative.org/capital-markets-and-other-financial-instruments-landscape-of-climate-finance-for-land-use-in-brazil-2021-2023/

Chicago

Climate Policy Initiative. Capital Markets and Other Financial Instruments. 2024. https://www.climatepolicyinitiative.org/capital-markets-and-other-financial-instruments-landscape-of-climate-finance-for-land-use-in-brazil-2021-2023/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Capital Markets and Other Financial Instruments |date=7 November 2024 |url=https://www.climatepolicyinitiative.org/capital-markets-and-other-financial-instruments-landscape-of-climate-finance-for-land-use-in-brazil-2021-2023/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2024capital, author = {{Climate Policy Initiative}}, title = {{Capital Markets and Other Financial Instruments}}, institution = {Climate Policy Initiative}, year = {2024}, month = nov, url = {https://www.climatepolicyinitiative.org/capital-markets-and-other-financial-instruments-landscape-of-climate-finance-for-land-use-in-brazil-2021-2023/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }