BNDES sets up first environmental fund

BNDES, the Brazilian development bank, is setting up the first participation investment fund in Brazil established purely to support projects that reduce carbon emissions.

New fund assets will be around R$250mn to R$400mn (US$147mn to US$234mn) and will be used with projects approved by the Clean Development Mechanism scheme, as defined by the Kyoto Protocol. This means the funds will be focused on companies involved in projects that can generate certified emission reductions, otherwise known as carbon credits.

Known as the Brazil Sustainability Fund (FBS), BNDES participation is limited to a 40% portion of the total fund. The fund is set up for the duration of 8 years, with an option to extend it for a further two years. The investment period is four years, extendable for up to one year.

"This pioneering initiative in the country is another demonstration of BNDES commitment towards the development of environmentally sustainable projects, contributing, at the same time, for the strengthening of the capital market and for increased awareness of investors on the importance of environment preservation,” affirms the president of BNDES, Luciano Coutinho.
The fund will be managed by Latour Capital do Brasil, an independent investment company.