The EU-Brazil green business forum highlights the need for continued commitment
The EU-Brazil Green Business Forum event, hosted by the European Union (EU) with the support of the Ministry of the Environment, the Brazilian Federation of Banks (Febraban) and WWF-Brazil, brought together 22 financial institutions and 70 Brazilian and European companies with the objective to uncover solutions for financing and boosting green businesses. One of the key drivers for hosting the forum was to discuss the main barrier, the lack of adequate funding for the development of technology and innovation projects, that Brazil faces in implementing changes established in the Paris agreement.
Low carbon agriculture, forest restoration, energy efficiency and energy generation were the topics of focus for the event, given that these areas are traditionally the most difficult to obtain funding and sustain business.
Speaking at the forum, the European Union Ambassador to Brazil, João Gomes Cravinho, emphasized that the bloc is one of the largest providers of public funding for climate action, dedicating 20% of its budget to the period 2014-2020, including 14 billion euros aid to developing countries.
Cravinho also pointed out that, “The European Union is committed to increasing the mobilization of international funding for climate action. The current collective goal of developed countries – to jointly mobilize US$100 billion a year between 2020 and 2025 – represents a figure considerably less than the billions of dollars a year needed to repair the consequences of disasters caused by climate change.”
In his attendance at the closing ceremony, Hector Gomez, Brazil’s General Director of the International Finance Corporation (IFC), the World Bank arm dedicated to business financing, stressed that the global challenges of projects in relation to financing is to address the issue between risk and return. “Financing for green businesses is quite difficult because of the risk. Many discussions are needed to find solutions to this challenge, but also actions such as developing scalable and replicable business models and crucial. At first, development banks and the public should help raise this market together with private banks. In the long term, these deals should occur in the private sector: companies and financial institutions.”
For Alfredo Sirkis, Executive Secretary of the Brazilian Forum on Climate Change, the event addressed a central issue for Brazil’s difficulties in complying with the Nationally Determined Contribution (NDC) established in the Paris agreement. In addition, it raised the opportunity to discuss some issues at the summit meeting on climate finance to be held in December in France, at the invitation of French President Emmanuel Macron.
“The Forum put its finger on the wound. It is estimated that it will take $ 3.5 to 5 trillion a year for global carbon reduction, when today virtually every government in the world is indebted, in addition to the fact that for financial institutions, green business risk is higher than in other sectors. Therefore, for the meeting that we will have in Paris on 12th December, we are taking the proposal to form an international guarantee fund so that compatible interest and acceptable returns can be negotiated. On this occasion, we will highlight the importance of the European Union’s strategic relationship with Brazil in this area.”
André Nahur, Coordinator of WWF-Brazil’s Climate Change and Energy Program, said, “It’s time to stop talking and start strengthening our actions and that’s what we realized during this Forum. Many things are already happening. New technologies and solutions for a low carbon economy are a reality.”
Mathieu Arndt, a senior consultant who supported the event, said: “It is possible to see at this forum that there is great potential for the green businesses. The challenge of course is the clear lack of access to financing. Events like this can promote the awareness of financial agents about the business models being proposed and how to deal with the specific risks involved.”
Speaking at the closing of the event, Cravinho commented, “The event strengthened the need to continue on this path of collaboration. For the European Union the issue of climate change is a priority in this strategic partnership with Brazil.”