Federal Government announces 2nd Eco Invest Auction, focused on restoring degraded lands

On Monday, April 28, the Brazilian Federal Government, through the National Treasury, announced the launch of the 2nd Eco Invest Auction, aiming to mobilize funds to finance projects for restoring degraded lands and converting them into sustainable productive systems.

The goal is to restore 1 million hectares of degraded lands across the Atlantic Forest, Cerrado, Caatinga, Pampas, and Pantanal biomes. The Amazon biome, due to its unique characteristics, will be addressed separately through a dedicated auction scheduled for the coming months.

This marks the second auction under the Eco Invest Program — jointly coordinated by the ministries of Finance (Fazenda) and Environment and Climate Change (Meio Ambiente e Mudança do Clima/MMA) — and forms part of the broader New Brazil: Ecological Transformation Plan (Novo Brasil – Plano de Transformação Ecológica), a strategy led by the Ministry of Finance to transition Brazil’s economy toward bioeconomy, green industry, and sustainable finance. In this stage, the auction falls within the Green Pathway Brazil Program (Caminho Verde Brasil) and involves partnerships with the Ministry of Agriculture and Livestock (Ministério da Agricultura e Pecuária/MAPA) and the Inter-American Development Bank (IDB).

"The Eco Invest Auction, a cornerstone of the New Brazil Ecological Transformation Plan, provides financial support for the recovery of degraded areas, adopting sustainable techniques and technologies that will significantly boost productivity, enhance water capacity, and expand permanent vegetation coverage — ultimately securing a prosperous and predictable future for rural producers," said Finance Minister Fernando Haddad.

The auction focuses on attracting private capital through local financial institutions to finance projects that convert degraded lands into sustainable production systems. These projects must meet strict environmental standards, including soil recovery and environmental conservation. According to National Treasury Secretary Rogério Ceron, the program also generates social benefits by promoting the inclusion of small farmers and strengthening the domestic food supply through the sustainable increase of productivity on currently degraded lands.

"Eco Invest represents a tangible step toward restoring degraded lands and advancing sustainable agriculture in Brazil. By setting rigorous environmental standards and requiring practices such as soil conservation, water protection, and anti-deforestation measures, we ensure that economic development goes hand in hand with social inclusion and environmental stewardship," stated Marina Silva, the Minister of Environment and Climate Change.

Currently, about 280 million hectares in Brazil are used for agriculture and livestock, including 165 million hectares of pasturelands, of which 82 million are degraded. The government's target is to restore up to 40 million hectares of pasturelands over the next decade. For this auction, the goal is to recover 1 million hectares across the listed biomes.

"With Eco Invest, Brazil has introduced an innovative program with immense impact potential and international replicability. By combining currency hedging, blended finance, and sound structuring, Eco Invest shows how to overcome investment barriers and unlock billions in private capital. For the IDB, Eco Invest is a source of great pride. It proves we can achieve scale and impact when we work together with innovation," said Ilan Goldfajn, President of the Inter-American Development Bank.

GREEN PATHWAY BRAZIL —The Federal Government is launching the Green Pathway Brazil Program, aiming to restore 40 million hectares of degraded land over the next ten years for sustainable agricultural use. Eco Invest Brazil will finance the first phase of the initiative, focusing on the recovery of up to 1 million hectares. For subsequent stages, MAPA is seeking funding from international investors and countries committed to promoting sustainable development.

“Brazil could nearly double its food production area without deforestation, thus preventing the expansion into native vegetation. This represents a significant opportunity to attract international investment and contribute to global food and nutrition security,” emphasized Carlos Fávaro, Minister of Agriculture and Livestock.

Green Pathway Brazil is a state program coordinated by MAPA and implemented in partnership with several ministries, financial institutions, and representatives from various sectors of agribusiness and federal agencies.

CALL FOR PROJECTS — As a new feature, the National Treasury has launched an online call for projects, inviting cooperatives, companies, and organized producers to submit proposals for the restoration of degraded lands. The goal is to enhance the likelihood of selection by participating banks for Eco Invest financing. Proposals can be submitted until June 13, 2025, via email at projetosecoinvest@tesouro.gov.br.

This initiative represents a significant step toward broadening participation and enabling more stakeholders to access funding and contribute to the program's objectives.

FINANCING MODEL — The auction will be conducted using a blended finance model, where Eco Invest’s public funds will serve as catalytic capital to attract private investment. Each bid will be evaluated based on the proposed leverage ratio and the volume of hectares to be restored, with a minimum investment requirement of BRL 100 million. The creation of Investment Funds for Agro-Industrial Production Chains (FIAGRO) and Receivables Investment Funds (FIDCs) will also be encouraged to structure operations and attract additional capital. The goal is to leverage up to BRL 10 billion in total investments for land restoration.

GUIDELINES — The funds mobilized through the auction will be directed to rural producers, agricultural cooperatives, and companies connected to agribusiness production chains, including bio-input manufacturers, agricultural technology firms, food processors, slaughterhouses, and biofuel plants. The aim is to ensure that environmental restoration is accompanied by both social and productive inclusion.

Funded projects must adhere to strict environmental criteria, which include continuous monitoring of environmental impact—particularly greenhouse gas emissions measurement; periodic soil quality assessments; and the expansion of permanent vegetation cover. Participating financial institutions must allocate at least 50% of their investment portfolios to food production, with a special focus on animal protein and crop production. Additionally, the restoration of the Caatinga biome must be prioritized.

After the ordinance is published, proposals must be submitted by June 13, 2025.