BNDES cuts interest rates for companies with environmental and social performance

Companies that reduce emissions of polluting gases or increase social initiatives, demonstrating an expansion of their environmental, social and governance (ASG) performance, will reduce interest rates on financing from the National Bank for Economic and Social Development (BNDES).

According to the bank, the program will provide financing with free allocation, not related to investment projects, to companies that are committed to improving their sustainability indicators. The foundation informed that “those who meet the minimum compensation and reach the goals stipulated in the program will receive a reduction in the interest rate.”

The BNDES Credit ASG program targets companies in the timber chain that focus on reforestation, equipment manufacturers for the renewable energy and energy efficiency chain, mining, and steel, and sectors that have potential for environmental improvement.

On the social side, the sector chosen was that of small Internet providers, which are directly linked to the ESG agenda. Increasing the supply of connectivity is one of the goals of the 2020-2022 Triennial Plan of the Foundation. The bank expects, at a later time, to extend the program to other sectors.

The program has a budget of R$1 billion, which will allow loans of up to R$150 million for each economic group. Interested companies must submit their applications directly to the BNDES by December 31, 2023. The total repayment period will be up to 96 months, including a grace period of up to 24 months.

More sustainable Brazil

The Director of Productive, Social and Environmental Credit at BNDES, Bruno Arana, said the innovative solution for linked loan (Credit with incentives for good social and environmental performance) is another important step, as it supports and encourages companies to adopt best practices and rethink their business models in favor of a low-carbon and inclusive economy.” The Bank’s Infrastructure Credit Manager Petronio Cansado noted that the goal is to adjust companies According to the community’s desire for a “more sustainable Brazil”.

In order to receive a reduction in the interest rate, companies must comply with certain minimum obligations, including the annual publication of a social and environmental responsibility policy; Incorporating business priority focus points on education and diversity into the company’s social investment policy, as part of a strategy to combat prejudice and discrimination based on race, LGBT, race, gender, and disability; And the annual publication of the sustainability report in the form Global Reporting Initiative or similar.

The company must also achieve two goals that will be selected from five pre-defined indicators: obtaining an environmental certification; obtaining a social certificate; conducting an inventory to reduce greenhouse gas emissions or carbon sequestration; Expansion by at least 10% in the number of suppliers from the northern and northeastern regions, which focus on the municipalities with the least social development in the country; And the expansion of the customer base of broadband services, taking into account the pre-established goals, in the case of small Internet providers.

partnership

BNDES also reported that the program indicators and its counterparts resulted from a survey of best practices in this area, implemented with the support of the British Government, in partnership with the UK Embassy in Brazil.

The director of the British government’s green finance program in Brazil, Katia Venives, stated that the new Brazilian program would enable “more sectors to find viability to definitely transition to a low-carbon model”.