Brazil: Brazil Value-Enhancing Reforms for Development and Ecological Sustainability (VERDES) Climate Policy-Based Financing

proposed

While Brazil faces increasing vulnerability to adverse impacts from climate change particularly in the agricultural sector and urban areas, Brazil can further strengthen its capability to rein in Greenhouse Gas (GHG) emissions through strategic policy reforms and innovative financial, economic, and social instruments such as carbon market, blended climate finance, technology development, and community participation in conservation of critical natural assets. Furthermore, these innovative instruments are also aiming at attracting greater private sector investment in sustainable and climate friendly projects and programs. To support the government's National Determined Contribution (NDC) ambition to move toward net zero in 2050 and resilient development pathway under the ETP platform, AIIB designed the Brazil VERDES Climate Policy-Based Financing (BR-CPBF) Program in close collaboration with the Government of Brazil (GOB) and in coordination with development policy financing programs led by the World Bank (WB) and the Inter-American Development Bank (IDB). The Program comprises three Pillars and corresponding Policy Actions (PAs) that are closely aligned with the three thematic areas of the ETP: Pillar 1 - Sustainable Finance: Directing public, private, national, and international financial resources to sustainable activities, low carbon growth, resilience, ecological transformation, and biome regeneration. Pillar 2 - Energy Transition: Promoting technologies in sustainable bioenergy with competitive cost and ensuring sustainable value chains. Pillar 3 - Green and Resilient Infrastructure: Enhancing resilience of critical natural assets and infrastructure to mitigate and address potential impacts of climate change, as well as protect and restore critical natural ecosystems.