BNDES - Brazilian Development Bank
   




Guidelines and environmental criteria for support for the sugar and ethanol sector

The BNDES’ support for sugar and ethanol sector requires clients to comply with several criteria and environmental guidelines, either in direct and indirect financing operations or when underwriting securities. These specific criteria are not included in other environmental requirements related to any financial support from the BNDES, contributing to economic development on a sustainable basis.

Environmental criteria and guidelines when providing support to the sugar and ethanol sector apply to planting, renovation, the cost of crops, and the industrialization of sugarcane so as to produce ethanol, other biofuels deriving from sugarcane and sugar (except brown sugar). Such activities correspond to the following codes in the National Classification of Economic Activities (CNAE), of the IBGE:

  • 0113-0/00 - cultivating sugarcane
  • 1071-6/00 - manufacturing raw sugar
  • 1072-4/01 - manufacturing refined sugarcane
  • 1931-4/00 – manufacturing ethanol

Criteria for direct and indirect non-automatic operations, and underwriting securities

For agricultural support

Companies applying for financial support should:

  1. during the analysis phase of the operation, present a declaration attesting that planting, renewing and the cost of sugarcane cultures, as the case may be, occur and will occur entirely in areas permitted by Decree Nº. 6,961, 09.17.2009, and by the National Monetary Council Resolutions (CMN) Nº. 3.813 and Nº. 3.814, of 11.26.2009.
  2. as a precondition to receive financial support and throughout the term of the loan agreement, maintain updated records of all properties, leased or part of a partnership where the applicant carries out the project, including the following information: (i) name of the property; (ii) municipality and the state where rural property is situated; (iii) geo-referenced point of any rural property; (iv) rural property registration number in the National System for Rural Registration; and (v) environmental license number or an equivalent document, or proof of exemption from licensing from the competent environmental agency.

For agroindustrial support

Companies applying for financial support should:

  1. during the analysis phase of the operation, present a declaration attesting that the implementation or expansion of the plant, as well as sugarcane production to be milled in the undertaking, occur and will occur entirely in the area permitted by Decree Nº. 6,961, of 09.17.2009, and by the resolutions of the CMN Nº. 3,813 and Nº. 3,814, of 11.26.2009;
  2. as a precondition to receive financial support and throughout the term of the loan agreement, maintain updated records of all properties own, leased or part of a partnership where the applicant carries out the project, containing the same information required for agricultural support, mentioned above. 
  3. implement a registration system until the date of the loan operation is awarded, with at least one registration entry and progressive updating, with the dates of the initial entry of all new records:
    (I) lands explored directly by the applicant company when planting sugarcane if is not being financed by the BNDES' resources, but that will be used at the power plant supported under the project, containing the same information described in item B above;
    (II) suppliers of the sugarcane to be milled at the power plant supported under the project, including the following information: (i) corporate name of supplier; (ii) individual taxpayer’s number (CPF/MF), or corporate taxpayer’s number (CNPJ/MF) of the supplier; (iii) name of the property; (iv) municipality and the state where rural property is situated; (v) geo-referenced point of any rural property; (vi) of rural property registration number in the National System for Rural Registration; and (vii) environmental license number, or proof of application for environmental licensing, or an equivalent document, or proof of exemption from licensing from the competent environmental agency.

Both in the agricultural and agro-industrial support, clients should still keep required records updated and make them available to the BNDES. False declarations and failure to keep said records up-to-date may result in the immediate termination of the contract, in addition to applicable legal penalties.

In corporate stake operations, it must be proven that all the sugarcane consumed by the company comes from areas permitted by Decree Nº. 6,961 of the CMN and the Resolutions already mentioned. This proof may be in the form of a statement given by company representatives.

Criteria for automatic indirect operations

For agricultural support

The accredited financial institutions should request the following from applicants:

  1. A declaration that certifies that planting, renewing and the cost the sugarcane culture, as well as the use of machinery or equipment financed for these purposes, as the case may be, occur and will occur entirely in areas permitted by Decree Nº. 6,961, of 09.17.2009 and by the National Monetary Council Resolutions in Nº. 3813 and Nº. 3814, both of 11.26.2009;
  2. Solely for investment projects – updated records of all properties, those leased and part of a partnership where the applicant carries out their project, containing: (i) name of the property; (ii) municipality and the state where rural property is situated; (iii) geo-referenced point of any rural properties; (iV) rural property registration number in the National System for Rural Registration; and (v) an environmental license number or equivalent document or proof of exemption from the competent environmental agency.

It is a precondition to present the registration for the loan to be awarded.

For agroindustrial support

Accredited financial institutions should request the following from applicants:

  1. A declaration attesting that the implementation or expansion of the plant (in financing investment projects); or the use of machinery and/or equipment financed for the implementation or expansion of the plant (in financing for these items); as well as the production of sugarcane to be milled in the undertaking receiving financing (in both cases), occur and will occur entirely in areas permitted by Decree Nº. 6,961, of 09.17.2009 and the Monetary Council Resolutions in Nº. 3,813 and Nº. 3,814, both of 11.26.2009. In financing investment projects, the applicant, in the declaration statement, should also promise to implement a registration system to prove the origin of sugarcane until the loan is awarded, with at least one registration; promise to progressively update them, including the date of entry of all new records, plus keep them safe and make them available to the Agent and the BNDES, when requested.
  2. solely for investment projects – updated records of all properties, those leased and part of a partnership where the applicant carries out their project, containing: (i) name of the property; (ii) municipality and the state where rural property is situated; (iii) geo-referenced point of any rural property; (iv) rural property registration number in the National System for Rural Registration; and (v) environmental license number or equivalent document or proof of exemption from the competent environmental agency.

    It is a precondition to present the registration for the loan to be awarded.
     
  3. solely for investment projects – the implementation of registration until the date the loan is awarded, with at least one record, and progressively updating, including the date of entry of all new records:
    (I) the land directly explored by the applicant, in which planting sugarcane is not being financed with the BNDES’ resources, but they supply sugarcane to be milled at the power plant supported under the project, containing the same information described in item (B) above; and
    (II) suppliers of sugarcane to be milled at the power plant supported under the project, including the following information: (i) corporate name of the supplier; (ii) individual taxpayer’s number (CPF/ MF) or corporate taxpayer’s number (CNPJ/MF) of the supplier; (iii) name of the property; (iv) municipality and the state where rural property is situated and geo-referenced point of any rural property; (v) rural property registration number in the National System for Rural Registration; and (vi) environmental license number, or proof of application for environmental licensing, or an equivalent document proving exemption from licensing from the competent environmental agency.

False declarations may result in the immediate termination of the contract, in addition to applicable legal penalties.

A special obligation of the contract for financial support requires updating and maintaining clients available to the financial agent/Lessor/Issuing Office, and the BNDES, until full financing has been repaid, duly up-to-date registrations, as the case may be, and the early termination of the loan agreement may be declared in the case of non-compliance.

In the case of the BNDES Card , declarations and records mentioned should be required when there is a request for documents to issue the card. Model statements above are available at BNDES' Card Operations Portal.



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