10 April 2019

Financial Instruments for Brazil Energy Efficient Cities (FinBRAZEEC)

Written by Caixa Economica Federal
10 April 2019

Date of effectiveness: 06.2018

The project objective is to unlock financing for energy efficiency projects in Brazilian cities, in particular in the public street lighting and urban industry sectors, by improving the credit rating and technical quality of projects. The project will support the identification of short-listed cities, pre-feasibility, technical, economic, financial, social and environmental studies, the structuring of guarantee mechanisms, and legal and regulatory assessments.

The financing proposal foresees the creation of an Energy Efficiency Facility (EEF), managed by the Caixa Econômica Federal (CAIXA), to invest in public lighting and industrial energy efficiency subprojects.

The EEF will have three basic funding sources:

  1. GCF (Green Climate Fund) totaling US$196 million (loaned to Caixa by World Bank);
  2. CAIXA, with the credit lines already managed, totaling US$180 million;
  3. National private banks to provide an estimated US$400 million.

It is expected to support:

Identification and selection of a set of short-listed cities

  • Support for program-level pre-feasibility technical, economic, financial, social, and environmental studies to enable the selected municipalities to make informed decisions about PPPs;
  • Structure the guarantee mechanism required to attract private-sector financing;
  • Conduct legal, regulatory, and institutional assessments to foster wider and long-term participation of the private sector in Brazilian street lighting programs