Tracking Climate Financing #8: How the Pandemic Changed BDMG’s Plans CLIMATE ACTION FL II
By Yandra França (CFC-GS/UFPA) The European Investment Bank (EIB) is one of the world’s largest multilateral providers of climate finance. In this project, in partnership with the Development Bank of Minas Gerais (BDMG), more than 100 million euros were made available to the Minas Gerais-based bank, specifically for the renewable energy sector. Through a partial loan established in 2019, the BDMG CLIMATE ACTION FL II was created with the primary objective of co-financing climate mitigation initiatives in the energy sector, supporting sustainable development in the region. The project was intended to support both renewable energy (such as small photovoltaic plants and run-of-river hydroelectric plants) and energy efficiency projects that directly contribute to mitigation, particularly in public buildings, industrial facilities, and public lighting. The EIB’s financing was intended to cover up to 75% of the final investment cost of the projects; the beneficiaries were mostly selected from among private institutions, which contributed to the development of the sector’s economic infrastructure. In addition, some programs classified as public were also eligible to participate in the project. Thus, the program’s various projects were scheduled to be completed by 2023. However, amid the COVID-19 pandemic in 2020, a new agreement was signed: This time, it provided greater flexibility and expanded the eligibility criteria for the loan. Now, BDMG CLIMATE ACTION FL II was also aimed at SMEs affected by Brazil’s health crisis. With the new agreement, SMEs—and especially microenterprises—across Brazil would have faster access to up to 30 million euros in financing, alongside renewable energy projects. Amid all the chaos and uncertainty brought by the pandemic, the EIB had to adapt and reorganize its contracts and partnerships in Latin America, and Brazil was no exception. Continuing the partnership, during the United Nations Climate Change Conference COP26, an additional €20 million in financing supplemented the previous agreement, still focused on SMEs in Minas Gerais. The EIB ensured that the focus remained on the United Nations Sustainable Development Goals (SDGs), both in terms of a sustainable economy and economic recovery on more sustainable and inclusive grounds in the state of Minas Gerais. The figures and results of this partnership are not explicitly listed on any of the partner banks’ websites. However, you can access this and other climate finance funds for free on our tracker. The BDMG CLIMATE ACTION FL II is one of many examples of funds, projects, and loans that had to be restructured during the pandemic, pushing what was initially the central plan into a supporting role. Want to learn more about climate finance? Stay up to date with our series on Tracking, and read other blog posts. REFERENCES https://www.eib.org/fr/registers/all/91827172 https://www.eib.org/en/press/all/2021-394-brazil-eib-increases-support-for-climate-action-projects-and-businesses?lang=pt https://www.eib.org/fr/press/all/2020-305-finance-in-common-summit-eib-and-bdmg-support-smes-impacted-by-covid-19-in-brazil
