By Andressa Lima (UFPA/ CFC-GS)
International climate finance to Brazil has become one of the key pillars for enabling the country’s ecological transition. In 2023, the amount of resources committed by international donors reached significant levels, revealing both the priorities of funders and the strategies adopted by Brazilian institutions to access these funds. A detailed analysis of the most recent data helps us understand not only who is financing, but also where the money is going, in what form it is being delivered, and with what main goals.
In total, Brazil received approximately USD 3.29 billion in international climate finance in 2023. This amount encompasses both mitigation and adaptation actions and reflects the country’s global relevance in climate matters, especially in the run-up to COP30, which will be held in Belém do Pará.
Starting with the origin of the funds (Graphic 1), the main climate finance donors to Brazil in 2023 were multilateral development banks. The Inter-American Development Bank (IDB) led the ranking with nearly USD 928 million, followed by the Development Bank of Latin America and the Caribbean (CAF), which committed about USD 862 million. Next came the World Bank, with USD 309 million, and France, which allocated USD 267 million in climate finance to Brazil. These figures reflect Brazil’s importance on the regional climate agenda, particularly given its strategic position in Latin America and its central role in Amazon conservation.
Graphic 1: Top 10 Donors in Climate Finance to Brazil (2023)
Source: Author’s elaboration based on OECD CRS – Climate-related Development Finance data.
In addition to multilateral banks, other key players included the Asian Infrastructure Investment Bank (AIIB), Germany, the European Investment Bank, and Japan. The United States, on the other hand, contributed a relatively modest amount, raising questions about its level of engagement with climate challenges in South America. This distribution suggests that multilateral banks, with a focus on infrastructure and development, play a crucial role in funding climate projects in Brazil, while bilateral donors still have room to expand their participation.
Equally important is understanding where and how these resources are applied. According to Graphic 2, the sector that received the most funding in 2023 was Banking and Financial Services, with nearly USD 780 million. This may include initiatives aimed at developing green financial instruments such as sustainable bonds, climate funds, or green credit mechanisms. Next were the Environmental Protection and Transport and Storage sectors, with USD 535 million and USD 435 million, respectively. These two sectors are directly linked to public policies for environmental conservation and emissions reduction, such as sustainable urban mobility.
Graphic 2: Top 10 Sectors Receiving Climate Finance in Brazil (2023)
Source: Author’s elaboration based on OECD CRS – Climate-related Development Finance data.
Other notable sectors included Energy, with over USD 340 million, and Water Supply and Sanitation, with around USD 209 million. Together, these reflect a focus of climate finance on basic infrastructure and energy decarbonization. On the other hand, areas like Education, Health, and Social Services appeared at the bottom of the list, suggesting that the human and social dimension of the transition remains underfunded. This imbalance could undermine the goals of a just, inclusive transition with equitably distributed benefits.
Another key dimension is the primary objective of the funding: adaptation or mitigation. As shown in Graphic 3, most of the resources directed to Brazil in 2023 focused on mitigation efforts, totaling USD 2.58 billion. Adaptation projects received USD 1.22 billion, less than half. This disparity follows international trends that favor mitigation actions due to their more tangible results in emission reduction. However, given Brazil’s vulnerability to extreme climate events—such as droughts, floods, landslides, and wildfires—investments in adaptation must grow faster to ensure the resilience of the most affected populations.
Graphic 3: Distribution of Climate Finance to Brazil (2023)
Source: Author’s elaboration based on OECD CRS – Climate-related Development Finance data.
When examining how resources are delivered, Graphic 4 highlights the dominance of grants, which accounted for nearly 80% of projects in 2023. Loans came in second at around 17%, while equity participation made up only 2.7% of projects. The fact that most projects are financed through non-repayable resources is a positive sign, especially for adaptation areas, which often have lower financial returns. However, the low use of equity instruments indicates limited private investor attraction to climate finance in Brazil — a major challenge going forward.
Graphic 4: Distribution of Projects by Type of Financial Instrument (2023)
Source: Author’s elaboration based on OECD CRS – Climate-related Development Finance data.
Regarding cooperation modalities (Graphic 5), concessional loans were the main instrument used, totaling nearly USD 2.88 billion. These loans offer more favorable conditions than traditional market loans, such as lower interest rates and longer repayment periods, making them vital for large climate infrastructure projects. Next was sectoral budget support, totaling USD 359 million. This allows funds to go directly into public budgets, tied to specific climate policies. Project support via grants had a minor share, with only USD 35 million, showing that donated funds are mainly structured through development banks, rather than via ad hoc projects.
Graphic 5: Cooperation Modalities in Climate Finance to Brazil (2023)
Source: Author’s elaboration based on OECD CRS – Climate-related Development Finance data.
Although most projects in 2023 were funded through grants, the total financial volume was heavily concentrated in concessional loans. In other words, Brazil received many small projects via grants, but the largest sums — especially for infrastructure — came through debt operations. This dynamic is illustrated in Graphic 6, which compares the number of projects and the committed value by financial instrument.
Graphic 6: Number of Projects and Committed Amount by Financial Instrument in Brazil (2023)
Source: Author’s elaboration based on OECD CRS – Climate-related Development Finance data.
Although grants accounted for nearly 80% of all climate finance projects registered in Brazil in 2023, they represented only USD 278 million — less than 10% of the total funding volume. This amount includes all forms of grants identified in the climate finance system, such as direct project-based grants (including the USD 35 million allocated under the “project support” modality), technical cooperation grants, grants channeled through multilateral development banks, and other types of non-repayable support. In contrast, loans — despite representing only 17% of the projects — amounted to approximately USD 2.8 billion, highlighting the central role of multilateral banks and large-scale climate credit. Equity financing appeared only marginally, both in terms of number of projects and financial volume, suggesting that the mobilization of private capital for climate finance in Brazil remains a largely untapped opportunity.
This scenario reveals a significant contradiction. Although global narratives emphasize fair and accessible financing for developing countries, most resources still come in the form of loans. Even with concessional terms, these loans increase debt and strain public budgets. This raises concerns about how “fair” the current climate finance system really is. To ensure a truly just ecological transition, it is essential to increase non-repayable funding (like grants) and create new support mechanisms that better share risks without overburdening countries that have contributed the least to the climate crisis.
Given this panorama, it is clear that Brazil has played a key role in attracting international climate finance, both in volume and in diversity of sectors and instruments. However, the data also reveal inequities and major challenges: the predominance of loans over grants, the low use of equity instruments, and the concentration of resources in sectors like infrastructure and finance, to the detriment of social sectors and climate adaptation.
On the eve of COP30 in Belém, Brazil has a unique opportunity to lead the global debate on equity in climate finance. Strengthening transparency, diversifying financial instruments, and ensuring more balanced resource distribution between mitigation, adaptation, and social justice are essential steps toward a truly sustainable transition. The future of the climate demands not just more funding, but fairer, more strategic, and better-aligned financing with the real needs of vulnerable territories and populations.
