Blended Finance

The Blended Finance Sub-line is grounded in the concept of using catalytic capital (at a reduced cost) to mobilize private capital. Competitive-rate credit lines will be provided to complement project funding for investors that carry out debt-raising operations through capital markets or through contractual debt arrangements with financial institutions abroad. Such operations must necessarily be directed toward financing projects in key sectors of the ecological transition, and external debt raises must be associated with currency hedging mechanisms in order to prevent excessive foreign exchange risk exposure on the part of local companies. 

In practical terms, the Sub-line will operate as follows: local financial institutions will be able to access the line under the Eco Invest Brazil Program and on-lend the funds to investors as a complement to capital market operations abroad. The proportion of such complementary funding will be determined through auction rounds for the distribution of credit lines, rewarding those institutions that require the smallest share of catalytic capital (low-cost funding) as a complement to external debt-raising operations with currency hedging aimed at enabling greenfield projects (to be developed from the ground up) in the Program's eligible sectors — particularly under the pillars of technological development, bioeconomy, energy transition, circular economy, green infrastructure, and climate change adaptation.