World Bank to lend $500 million to Brazil to help meet climate goals

The World Bank’s board of directors approved a $500 million project in Brazil late Thursday to expand sustainability-linked finance, strengthen the private sector’s capacity to access carbon credit markets, and assist the country in combating deforestation.

 

The initiative, in collaboration with the Brazilian state-controlled lender Banco do Brasil, takes a sustainable lending approach to help Brazil meet its climate goals and provide ‘robust’ mitigation benefits, according to a bank statement.

 

When certain environmental, social, and governance (ESG) requirements are met by a company, sustainability-linked financing (SLF) allows for lower financing costs but does not require the funds to be used for climate-friendly purposes.

 

The World Bank and its partners launched a global tracking system in early December to clean up the opaque carbon credit market and help developing countries raise much-needed climate finance more quickly and cheaply.