INSTRUMENT ANALYSIS

The Guarantee Fund for Biogas (GFB) is a proposed financial instrument designed to unlock public and private credit for independent biogas project developers in Brazil by providing construction-phase loan guarantees. By acting as a CVM-compliant fixed-income fund investing in treasury bills, the GFB addresses the lack of collateral that prevents smaller developers from accessing existing credit lines, aiming to scale Brazil's biogas capacity and reduce greenhouse gas emissions.

• The Guarantee Fund for Biogas (GFB) is designed as the first environmental guarantee fund in Brazil, specifically targeting independent biogas developers who lack the collateral required by lenders, who often demand guarantees of up to 120% of the loan value.
• The instrument will be structured as a closed fixed-income fund under CVM Instruction nº 555, investing 100% of its resources in Brazilian treasury bills and pledging its shares as collateral for project loans registered as liens in B3.
• The GFB utilizes a blended finance structure with a first-loss tranche comprising 50% of the capital funded by concessional investors to absorb initial defaults, and a senior tranche of 50% funded by commercial investors.
• The pilot phase requires an initial fundraising of USD 53 million (split equally between concessional and commercial capital) to enable USD 67 million in loans in the first year and USD 271 million over a 10-year lifespan.
• Once a track record is established, the fund aims to leverage its resources up to 3 times its equity, which would enable a total of USD 813 million in credit demand over 10 years using the same initial USD 53 million capital.
• The pilot phase is expected to mitigate approximately 348,000 tons of CO2e per year, with potential for 7.8 million tons per year if replicated to address 10% of Brazil's electric energy biogas potential (1.7 GW).
• The GFB focuses on projects using agricultural and urban solid waste to avoid food security risks; the pilot specifically targets agriculture waste and excludes urban landfill projects because they are perceived as less climate-friendly and more bankable.

APA

Climate Policy Initiative (2021). INSTRUMENT ANALYSIS. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/09/Guarantee-Fund-for-Biogas_Instrument-Analysis.pdf

Chicago

Climate Policy Initiative. INSTRUMENT ANALYSIS. 2021. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/09/Guarantee-Fund-for-Biogas_Instrument-Analysis.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=INSTRUMENT ANALYSIS |date=September 2021 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2021/09/Guarantee-Fund-for-Biogas_Instrument-Analysis.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021instrument, author = {{Climate Policy Initiative}}, title = {{INSTRUMENT ANALYSIS}}, institution = {Climate Policy Initiative}, year = {2021}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2021/09/Guarantee-Fund-for-Biogas_Instrument-Analysis.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }