Brazil’s $3B Funding Push Spurs Bank Interest in Regenerative Agriculture

Brazil is stepping up its land restoration efforts with a new $3 billion (BRL 16.5 billion) allocation under the second phase of its EcoInvest programme. The initiative aims to bring 1.4 million hectares of degraded land back to life through regenerative agriculture and large-scale reforestation.

Close-up of a jaguar among the vegetation of the Amazon forest with toucans flying in the distance. AI generated picture.

The funds will be provided to banks at subsidised rates, serving as guarantees for new loans to finance restoration projects. The latest public call has already drawn proposals from 11 banks, following an initial tender in April that offered $1.8 billion (BRL 10 billion).

‘The financial sector has a great appetite [for carbon projects], as shown by the public call,’ said Amaury Oliva, sustainability director at Febraban, Brazil’s largest banking association, speaking at São Paulo Climate Week.

EcoInvest supports projects across all six of Brazil’s major biomes—the Amazon, Atlantic Forest, Cerrado, Caatinga, Pampa, and Pantanal—by enabling banks to extend affordable loans using their own capital. This latest round is projected to unlock up to $5.6 billion (BRL 30.2 billion) in new financing.

Participating banks must submit bids of at least $18.5 million (BRL 100 million), with 60% of the raised capital sourced from international lenders. Priority will be given to projects that restore the largest areas of land, and only properties where illegal deforestation took place before 2008 are eligible.

‘The public call was a success … and one of the variables [ranked by the government] is the amount of carbon captured’, said Maria Belen Losada, head of carbon markets at Itaú, Brazil’s largest bank. ‘The call will have a multiplier effect as it combines resources from the government with capital from the banks alongside carbon markets that it can be monetised.’

Brazil has an estimated 100 million hectares of degraded land, according to the Institute of Forestry and Agricultural Management and Certification. The programme also received technical backing from the Inter-American Development Bank and the UK Embassy in Brazil. ‘The UK is proud to support initiatives like Eco Invest, which combine financial innovation with real climate impact… and strengthen sustainable chains on a large scale’, said Stephanie Al-Qaq, UK Ambassador to Brazil.