The Program supports the Government of Brazil’s actions toward achieving the climate goals articulated in the Nationally Determined Contributions (NDCs) through policy and institutional measures required to implement the Ecological Transformation Plan (ETP) in the areas of sustainable finance, energy transition, and green infrastructure and resilience.
While Brazil faces increasing vulnerability to adverse impacts from climate change particularly in the agricultural sector and urban areas, Brazil can further strengthen its capability to rein in Greenhouse Gas (GHG) emissions through strategic policy reforms and innovative financial, economic, and social instruments such as carbon market, blended climate finance, technology development, and community participation in conservation of critical natural assets. Furthermore, these innovative instruments are also aiming at attracting greater private sector investment in sustainable and climate friendly projects and programs.
To support the government’s National Determined Contribution (NDC) ambition to move toward net zero in 2050 and resilient development pathway under the ETP platform, AIIB designed the Brazil VERDES Climate Policy-Based Financing (BR-CPBF) Program in close collaboration with the Government of Brazil (GOB) and in coordination with development policy financing programs led by the World Bank (WB) and the Inter-American Development Bank (IDB).
The Program comprises three Pillars and corresponding Policy Actions (PAs) that are closely aligned with the three thematic areas of the ETP:
Pillar 1 – Sustainable Finance: Directing public, private, national, and international financial resources to sustainable activities, low carbon growth, resilience, ecological transformation, and biome regeneration.
Pillar 2 – Energy Transition: Promoting technologies in sustainable bioenergy with competitive cost and ensuring sustainable value chains.
Pillar 3 – Green and Resilient Infrastructure: Enhancing resilience of critical natural assets and infrastructure to mitigate and address potential impacts of climate change, as well as protect and restore critical natural ecosystems.
Applicable Policy and Categorization. AIIB's Environmental and Social Policy (ESP), including the Environmental and Social Exclusion List (ESEL) and provisions related to CPBF set forth in Section 16 of the ESP, are applicable to this Program. Therefore, the provisions on Environmental and Social (ES) categorization in the ESP do not apply to this Program. The Program focuses on policy and institutional reforms that do not entail involuntary resettlement or impact the lives of Indigenous Peoples, which will result positive ES impacts both in terms of health benefits as well as security of land access, environmental conservation and improved environmental quality. However, some downstream investment activities resulting from specific policy actions under the Program may lead to indirect, short-term and temporary adverse impacts. Brazil’s ES system and capacity are found to be adequate to manage residual ES impacts that may emerge during the Program implementation.
Environmental and Social Aspects. While downstream investments linked to the policy actions may lead to short-term, indirect ES impacts, Brazil’s strong environmental regulatory system, aligned with AIIB’s ESS1, is expected to adequately address such risks. Although the Program is not expected to generate significant adverse ES impacts during the program implementation, the relevant authority may consider using the ES Strategic Assessment as a tool to address emerging risks (if any) and identify measures to further create positive ES outcomes. In addition, the Program is categorized as effective gender mainstreaming and supports Brazil’s broader gender equality agenda, as reflected in the National Plan of Policies for Women and sectoral strategies in health, environment and labor. An ES assessment matrix that has been prepared covering the Program’s policy actions, which was based on an ES assessment (ESA). This matrix outlines the potential direct and indirect impacts of each prior action, along with corresponding mitigation measures. The gender risks associated with these prior actions were analyzed and incorporated into the ES assessment matrix as part of the social aspects.
Information Disclosure and the Program Grievance Redress Mechanism (GRM). ESA was disclosed on Bank’s website on Oct. 13, 2025. In accordance with Bank’s ESP, ES assessment matrix will also be timely disclosed on the Bank’s website. Brazil’s environmental regulatory system, along with existing GRMs in implementing agencies, is expected to adequately address ES risks and impacts. Individuals and communities who believe that they are adversely affected by the Program may submit complaints to the GRM of responsible government authorities and the appropriate local/national grievance mechanisms. The information of the GRMs to be used and AIIB’s Project-affected People’s Mechanism (PPM) will be disclosed in a timely and appropriate manner.
Monitoring and Reporting Arrangement. The Program implementation will be monitored by the Program Implementation Unit under the Ministry of Finance (MoF) and will provide an annual report to AIIB based on the agreed format. The Program monitoring of the ES performance is an integral part of the overall semi-annual Program monitoring mission to ensure compliance with its policy requirements and prompt resolution of any emerging issues. In coordination with the WB and the IDB, AIIB will carry out a separate annual program monitoring mission, which will include following up on the implementation progress toward the target results and the performance of the ES implementation.
Federative Republic of Brazil
Mario Gouvea Almeida
Secretariate of the Treasury, Ministry of Finance, Brazil
