The Inter-American Development Bank (IDB) has approved a $1 billion loan to back Brazil’s reform efforts aimed at improving the business climate and attracting private investment, the bank announced in a recent release. This loan is part of Brazil’s Ecological Transformation Plan, which focuses on better financial conditions, stronger governance, and enhanced institutional capacity.
At the center of this project is Eco Invest Brasil—a joint initiative between the IDB and the Brazilian government that introduces new financing methods and tools to reduce currency risks, which often hold back investment. IDB President Ilan Goldfajn explained that the goal is to bring in more private capital through solutions like blended finance and managing foreign exchange volatility.
“Our work aims to unlock investment, create jobs, and improve opportunities for Brazilians,” he said.
Brazil’s National Treasury Secretary, Rogério Ceron, praised the program’s innovations, saying they strengthen Brazil’s potential for higher productivity and better jobs while balancing social and environmental needs.
Eco Invest Brasil aims to attract around $10.8 billion by 2027, mostly from private sources. It will provide funds through blended finance, support project preparation, offer liquidity, and manage currency risks with an FX-derivative program.
The loan also supports a governance framework involving Brazil’s government branches to oversee the reforms. It sets standards for sustainable bond issuance and backs a national bioeconomy strategy. Additionally, it includes a fiscal element linked to recent tax reforms to improve the business climate.
This 20-year loan has a 5.5-year grace period and an interest rate tied to the Secured Overnight Financing Rate (SOFR), forming part of a broader international commitment to strengthen Brazil’s economy.
