Brazil’s development bank starts buying carbon credits

carbon credits bndes
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Brazil’s National Development Bank (BNDES), which is in charge of the Amazon Fund, on Tuesday opened a public tender to purchase up to BRL 100 million (USD 19.74 million) in carbon credits.

A webinar was held to explain the entire process — the first such large-scale initiative led by the BNDES — and the bank said further investment rounds could raise the volume of investments to BRL 300 million over the next three years.

The BNDES hopes its moves will kickstart the carbon credit market in Brazil, which the lower house of Congress estimates could attract up to USD 72 billion in credit trade with foreign companies.

Back in May, the BNDES approved a trial project to purchase BRL 10 million in carbon credits. In this inaugural call, BRL 8.7 million in credits were acquired from five developer companies: Biofílica Ambipar, Solví, Sustainable Carbon, Carbonext, and Tembici.

The credits were purchased on a forward basis; that is, the activities to reduce or remove CO2 (or other greenhouse gasses) that generate the assets are yet to be carried out. The two most significant projects acquired are for forest conservation (known by the acronym REDD+) — today the majority of carbon credit projects in Brazil fall into this category.

Per the provisions set out in the public tender rules, the BNDES is targeting projects that are fully developed and implemented n Brazilian territory, and that can demonstrate, according to voluntary certification standards, their contribution to capturing or reducing GHG emissions, besides generating carbon credits. 

A maximum of two proposals submitted by each bidder will be contracted, with a total value of up to BRL 25 million. Interested parties must submit their proposal by October 3 through the bank’s customer portal.