BNDES - Brazilian Development Bank

BNDES RenovaBio has its first financing for biofuels, rewarding emission reduction

May 12, 2021

 The Brazilian Development Bank (BNDES) approved the first operation of the BNDES RenovaBio Program, in the amount of R$ 100 million, for the plant Usina Santa Adélia S.A. The resources will be allocated to the group’s biofuel production unit, located in Jaboticabal (SP). It is a financial credit aligned with the SDG criteria (which considers environmental, social and corporate governance aspects), aimed at stimulating the reduction of carbon emissions with the use of fuels. BNDES’ financial support in this line is part of the RenovaBio program of the Ministry of Mines and Energy.

BNDES’ financing will support the company’s efforts to improve its efficiency and, if successful in this task, BNDES will grant it with reductions in the loan cost (in BNDES’ basic spread). If the company ends up disaccredited from the RenovaBio Program, the penalty will be an increase to the fee.

“The approval of this operation is emblematic for BNDES, as it inaugurates a new way to support the development of the biofuels sector in a faster and simpler way, and with incentive to increase productive and environmental efficiency,” highlights the superintendent of the Industry, Services and Foreign Trade Unit of BNDES, Marcos Rossi.

Efficiency — BNDES RenovaBio is an innovative program since it does not require a pre-defined investment project, but rather uses carbon emissions reduction goals. The program aims to assist the biofuels sector in the task of decarbonization of the Brazilian economy, encouraging the production and use of renewable fuels to the detriment of those of fossil origin.

That is, companies that contract resources under RenovaBio and that, over the loan payment period, reach the targets of CO2 emissions reduction stipulated by the program, will receive reduced interest rates.

To evaluate the achievement of the goals, BNDES will use the Decarbonization Certificate Issuance Factor (CBIO), an indicator calculated by the National Agency for Petroleum, Natural Gas and Biofuels (ANP). CBIO is issued through banks or other financial institutions, by the certified biofuel producer or importer. It is also a financial asset traded on the market by fuel producers and distributors and other investors. One CBIO unit corresponds to one ton of carbon that is no longer emitted into the environment.

BNDES RenovaBio thus aims to contribute to increases in productivity and the dissemination of technological innovations, consequently providing consumers with lower prices and greater supply of even more sustainable biofuels.

About BNDES – Founded in 1952 and currently linked to the Ministry of Economy, BNDES is the main instrument of the Federal Government to promote long-term investments in the Brazilian economy. BNDES’ actions focus on the socio-environmental and economic impact in Brazil. BNDES offers special conditions for micro-, small- and medium-sized enterprises, as well as social investment lines, directed at education and health, family agriculture, sanitation and urban transport. In crisis situations, BNDES acts in an anticyclical manner and assists in the formulation of solutions for the resumption of economic growth.

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