Brazil courts global investors in about-turn on protecting Amazon
Faced with a growing global outcry over its environmental policies, Brazil is now inviting foreign investors to help the country preserve the Amazon and other endangered areas of conservation.
The approach marks a substantial departure from the combative style adopted last year by President Jair Bolsonaro, who not only refused help from international organisations to battle Amazon fires but also blamed some of them, without presenting evidence, for setting the forest ablaze.
Brazil is changing its strategy as the government increasingly relies on market financing for its infrastructure projects, many of which require environmental licensing. Those involving the Amazon will have an environmental seal from the get-go so they can be financed with the sale of green bonds, according to infrastructure minister Tarcísio de Freitas.
De Freitas, who has been struggling to find funds to build the infrastructure works Brazil will need in the post-pandemic period, said in the government’s 250-billion real programme for the concession of roads, ports and airports is on track, despite widespread investor criticism of growing deforestation in the Amazon.
The government has faced mounting pressure from investors and entrepreneurs to do more to protect the environment. In June, institutional investors managing about $3.7trillion in assets asked Brazil to abandon a proposal they say will add to deforestation and violate the rights of indigenous groups in the Amazon.
In July, a group of 61 companies including pulp maker Suzano, meat packer Marfrig Global Foods, and agribusiness giant Cargill sent a letter to authorities stating that the negative perceptions are potentially damaging to both reputation and business prospects.
That pressure has also been seen on the ground. “Environmental
concern has appeared at road shows, but we were already prepared,” the minister said. “It is clear that the flow of private investments will be increasingly linked to environmental standards.”
AMAZON RAILROAD
One of the first such big-ticket projects will be a railway crossing a portion of the Amazon, connecting a grain-producing region in the country’s centrewest to a port on its north coast.
Ferrogrão is expected to have its licence auctioned in the first half of next year and has had a successful road show, the minister said.
The government is also working with the Climate Bonds Initiative to get credentials that will allow private companies to fund their investments through the sale of green debt. Supporting Ferrogrão’s green credentials is an expected reduction in the number of trucks moving grains through the region, which would lower carbon emissions and reduce the need for land development, De Freitas said.
Members of the administration continue to use a combative tone in regards to Brazil’s environmental policies — just last week, economy minister Paulo Guedes rebuked criticism of the government’s track record in the Amazon by saying developed countries have already destroyed their forests and decimated their indigenous populations. But that kind of language is not a concern for De Freitas.
“Investors are very pragmatic, they don’t care what one person said today. They think about concessions that will last for the next 70 years,” he said.
Despite the tone, the government has been trying to improve the country’s image abroad. Bolsonaro may extend a decree that keeps military troops in the Amazon until the end of 2022 to monitor deforestation more effectively, Vice-President Hamilton Mourão said at an event on Monday, adding that there are investors interested in exploring the Amazon in a sustainable way and it is necessary to set a regulatory framework for that.