Brazil readies new investment vehicle for sustainable projects
Brazil’s Treasury and its Securities and Exchange Commission (CVM) are gearing up to launch a new investment vehicle operating as an investment fund consortium to boost early-stage sustainable ventures, a senior Treasury official said
In an interview with Reuters, Rogerio Ceron said the new vehicle is aimed at financing the structuring of projects aligned with ecological transformation, following a similar format of private equity funds (FIPs) and receivables investment funds (FIDCs).
Ceron stressed that better-than-expected inflation data in the U.S. solidify a much more favorable outlook for the global economy, with positive implications for Brazil, which has recently witnessed a steep currency weakening and a rise in interest rate futures.
His remarks follow signals from Finance Minister Fernando Haddad and President Luiz Inacio Lula da Silva regarding the government’s commitment to fiscal responsibility, which have led to a partial recovery in local assets.
GREEN PLAN
The Treasury secretary said the new investment vehicle would be tied to a green project structuring credit line, first announced in February as part of a broad program to attract private investments as Lula seeks to bolster Brazil’s position in the environmental and climate agenda.
According to Ceron, the notice for this credit line auction is expected to be released in September. The released resources will assist financial institutions in creating the new structured investment funds.
This will be the second credit line out of four planned under the so-called EcoInvest program, following the Treasury’s notice last week for a blended finance auction, which will offer public capital to green projects primarily funded by private funds.
Reporting by Marcela Ayres and Bernardo Caram; editing by David Evans via Reuters