Brazil’s state-owned development bank BNDES, has successfully closed $7.3 billion worth of international partnerships for climate financing. The funds can be leveraged up to $9.6 billion, bank President Aloizio Mercadante told a press briefing during the COP31 climate summit.
Canada's Brookfield pension fund, Generation Investment Management of the US, and Brazilian investment company eB Capital, announced a total of $2.4 billion in contributions. These contributions will be leveraged up to $7.3 billion to finance projects related to the energy transition, the implementation of sustainable solutions, and the reduction of carbon emissions in industry.
The World Bank will provide support for the decarbonization of Brazil’s steel, cement, aluminum, and glass industries, as well as for the development of Sustainable Aviation Fuel (SAF) and e-methanol.
Additionally, BNDES secured a total of $147 million from the IBRD of the World Bank and CIF for forest conservation projects in Brazil. Private investment and other BNDES funding will help increase the overall project value to $488 million.
The development bank also signed letters of intent with the IDB and the World Bank to start the negotiation of financing of 5.5 billion reais in support of decarbonization in the industry.
In over three years, BNDES secured an investment partnership that helped the development bank raise 48 billion reais (BRL). According to Mercadante, at least double that amount will leave the building with us today.
Brazil's newly elected president has begun to shift the perspective of foreign investment in favor of the country's environmental policies. Many countries held out on their climate change policies, until they were sure about the outcomes of the election.
On Wednesday, the Asian nation of Indonesia promised one billion dollars to Brazil’s Tropical Forests Forever Fund, also known as the TFFF. This fund will provide financial incentives that are sustainable for the preservation of tropical forests.
Brazil's record breaking decline in deforestation in the Amazon drew a contribution of 350 million BRL to the Amazon Fund from Norway.
Forest preservation could generate $220 billion in economic benefits for Brazil
A different study by Bráulio Borges, an economist at the Brazilian Institute of Economics at FGV, estimated that from 2023 to 2026, deforestation reduction in the Amazon and Cerrado regions of Brazil could have reduced global economic costs related to climate change by R$ 1.16 trillion ($217 billion USD).
This study says that from $67 billion to $192 billion of these benefits could have accrued to Brazil alone.
Borges used estimates for deforestation between 2019-2022 and 2023-2026, finding that an estimated 22,300 km squared of forest was saved. Of this, 21,000 km squared was in the Amazon and 1,400 km squared was in the Cerrado.
The study estimates that this deforestation reduction averted 1.49 billion tons of GHG emissions during this period.
To estimate this, Borges used the social cost of carbon, an economic indicator used to assess the damages caused by GHG emissions. He adopted $145 USD/ton of carbon dioxide based on past studies.
INPE, Brazil's National Institute for Space Research, stated that between August 2025 and July 2026, deforestation in the Amazon reduced 41.8 percent and reduced 23.8 percent in the Cerrado. 3,335 km squared was deforested in the Amazon, the lowest since 1998.
This study does not estimate the impacts of forest protection on rainfall and agricultural productivity.
Borges highlighted the importance of the so-called "flying rivers", atmospheric moisture flows generated partly by forest evapotranspiration that transport water vapor from the Amazon to Brazil's central-western, southeastern and southern regions.
Research cited in the study estimates that rainfall generated by the Brazilian Amazon is worth approximately $20 billion annually when measured against the value of water used for agricultural irrigation.
The economist argued that reducing deforestation does not necessarily conflict with agricultural expansion, since farming itself benefits from rainfall generated by the forest.
He also said that existing international mechanisms, including the Amazon Fund, carbon markets and the TFFF, remain insufficient to compensate Brazil for the global economic benefits generated by forest preservation.
Borges recommended that policymakers incorporate the social cost of carbon more systematically into cost-benefit assessments of infrastructure projects, electricity expansion plans and tax and subsidy policies.
Without such measures, he said, economic decisions risk overlooking a substantial portion of the costs and benefits associated with environmental degradation.
