BNDES Role in Global Environment JBIC/ JOI/ BNDES/ Brazilian Embassy Seminar

Transcription

1 BNDES Role in Global Environment JBIC/ JOI/ BNDES/ Brazilian Embassy Seminar Tokyo, Eduardo Rath Fingerl Managing Director 1

2 Towards a New Economy Conserving biodiversity is the best deal to humankind, from an economic point of view (E. Wilson) Knowledge and Innovation will be directed towards products and services that save and preserve natural resources 2

3 New basis for environmental economy Pricing of economic activities and consumer patterns to induce non-predatory use of nature Accounting of use of natural resources Territorial use on sustainable basis (transports, sanitation, leisure) Existing technologies that recycle raw materials and use renewable energy sources Innovation will be fostered by these imperatives 3

4 B R A Z I L Brazil is an environmental power: biomes critical to human-kind, immense biodiversity, abundance of water, wind regimes, insolation The country has a strong potential for innovation with solid knowledge resources (institutions, companies, teams of researchers) It is strongly permeable to new ideas and concepts, has an active and democratic society and state institutions dedicated to environment preservation Claudio Frischtak 4

5 Number of papers Scientific Papers, indexed at ISI - Institute for Scientific Information 35,000 30,000 25,000 20,000 15,000 10,000 5, incubators of technologic firms 6300 firms linked to incubators % From world production Brazil accounts for 2% of world scientific production Source: MCT. 5

6 BNDES: Innovation as a priority Financial support instruments Portfolio: US$ 3,5 billion DEBT or Equity Capital Inovador FOCUS on STRATEGY = INTANGIBLES Technological Innovation Production Innovation FOCUS on the PROJECT e Proengenharia PROSOFT,PROFARMA,PROTVD,PRO-Aeronáutica SECTORAL DEBT or Equity VC / PE Funds Direct Investment CRIATEC Program (Seed Money) BNDES Card For micro, small and medium companies Certification and conformity assessment services; innovation, design, technological extension and software Non-refundable Fundo Tecnológico - BNDES Funtec Support to research institutes in areas of national interest 6

7 Equity: BNDES Role Governance Funds Capital Markets CRIATEC Seed Money Venture Capital Emerging companies Established companies Start-Ups Early Stage companies Private Equity IPO Seeds 7

8 BNDES IC methodology SECTORIAL COMPETITIVE DRIVING FORCES COMPETENCES & INTANGIBLE ASSETS CORPORATE STRATEGY FINANCIAL POLICY EXTERNAL RELATIONS Sustainable Responsible Business HUMAN RESOURCES CORPORATE GOVERNANCE PRODUCTION & INNOVATION 8

9 B N D E S Again: changing the mindset new metrics for environmental issues From disbursements to green disbursements 9

10 BNDES New Environmental Area Operating since 2009 Under same Managing Director as Venture Capital / Private Equity Area BNDES is seeking market solutions for environmental issues BMF&BOVESPA Carbon Efficient Index Private Equity / Venture Capital Funds 10

11 BNDES s Environmental Area (AMA) Superintendent Department of Studies and Policy (DEMAM) Department of Operations (DEOPE) Department of the Amazon Fund (DEFAM) Legal Department (JUAMA) Provides tecnical support for the analysis and adoption of best environmental practices for the projects financed by BNDES Conducts operations and develop financial instruments to foster environmentally sustainable activities ( green finance ) Responsible for managing the Amazon Fund Analyzes the legal impact of all AMA operations 11

12 BNDES Environmental Actions Credit Lines Support for Investments in the Environment: Special conditions for environmental projects that promote sustainable development in Brazil BNDES Forestry: Credit line aimed at the reforestation, conservation and forest recovery of degraded or converted areas, and sustainable use of native areas through forestry development PROESCO: Aimed at projects that contribute to power efficiency Programs BNDES Forestry Compensation: Support for the regularization of damage to the legal reserves on rural properties earmarked for agribusiness, as well as for preservation and appreciation of native forests and remaining ecosystems. 12

13 Funds and other initiatives BNDES Environmental Actions Amazon Fund: The core purpose of the Amazon Fund is to promote projects for preventing and combating deforestation, as well as for conservation and sustainable use of the forests in the Amazon biome. The Amazon Fund is managed by the BNDES and raises resources exclusively through donations. The BNDES Rain Forest Initiative: A selection of projects to allocate nonrefundable financial resources from the Social Fund, for the reforesting of areas with native species. The BNDES Clean Development Fund: Support for companies and projects that potentially generate Certified Carbon Reductions, through stakes in the companies capital Forestry PE: Investment fund for stakes in companies and/or projects focused on forestry assets 13

14 BNDES s Practices on Environment Definition and implementation of environmental guidelines Soy, Ethanol, Mining and Cattle industry Classification of every project environmental impact: A high impact B medium impact C low impact Environmental screening of projects Build-up analythic capabilities via training and coaching 14

15 BMF&BOVESPA Carbon Efficient Index ICO2 Joint iniciative between BNDES and New Stock Index based on Brazil Index 50 IBrX-50 (IBrX-50 is an index which measures the total return on a portfolio composed by 50 stocks selected among BMF&BOVESPA s most actively traded securities) ICO2 portfolio based on firm s efficiency on emissions of greenhouse gases Present stage: collecting inventories real or estimated by accredited consultancy 15

16 BNDES Investments in Funds Environmental and Venture Capital and Private Equity Areas have so far invested in 15 Innovation and Environmental Funds more than US$ 1 billion Cases to be noticed: Seed capital Vale Florestar Reforestation in the Amazon Region Fundo Brasil Sustentabilidade 16

17 Vale Florestar Private Equity Fund: one of the largest reforesting funds in Brazil, with equity of US$ 300 million to be invested by 2015 Purpose: to rehabilitate deforested or degraded areas in the Amazon Region through recovery and regeneration of native vegetation combined with industrial forests plantation 17

18 Fundo Brasil Sustentabilidade BNDES is the anchor investor of FBS First private equity fund in Brazil exclusively focused on supporting companies with projects generating carbon credits under the Clean Development Mechanism of the Kyoto Protocol Provides technical expertise in implementing projects generating carbon credits As an innovation compared to other private equity funds, the FBS has performance fees determined not only by the financial results, but also by generation of carbon credits 18

19 Venture Capital Fund: Burrill Brasil I Mission: life sciences Segments: biopharma functional foods and nutraceuticals agricultural biotech Industrial biotech renewable fuels Nanotech Estimated size: US$ 100 million Target: 12 companies to be invested Investment policy: 50% early stage companies (seed investments) 25% mid to late stage (VC size companies) 25% mature companies (low risk) World Conference on Intellectual Capital for Communities 1-2 June - Sixth Edition - 19

20 Amazon Fund Original proposal presented by the Brazilian government in Bali, Indonesia, December 2007, to create a mechanism to support efforts to reduce deforestation in the Amazon 20

21 Concept of the Fund The Amazon Fund is managed by BNDES, upon decree by the President of the Republic Objective: to raise donations for non-reimbursable investment in: Prevention, monitoring and combat deforestation Promotion of forest conservation and sustainable use of the Amazon biome Make forest more valuable than the alternative use of land Amazon Fund resources will only be disbursed as non-reimbursable loans 21

22 Fundraising Based on reduced emission from deforestation and Forest Degradation (REDD) Emissions avoided are based on the deforestation reduction compared to the 10-year average deforestation rate The ten-year average is revised every five years If deforestation rate is higher than the average rate, the Fund will not be able to raise funds in that year 22

23 Contributors Fundraising Governments (Norway first to support = US$ 300 million in 2009) Companies Non-governamental organizations Individuals All contributors will receive a diploma recognizing the contribution to the reduction of emission of X tons of CO2 from deforestation in the Amazon The diploma and its carbon credits are non tradeable 23

24 Projects approved Institution Project FAS- Sustainable Amazon Foundation FUNBIO ARPA- Brazilian Fund for Biodiversity IMAZON -Man and Environment Amazon Institute Instituto Ouro Verde Bolsa Floresta Program - Support to 10,000 families in Protected Areas Creation and maintainance of 45 million HA of Protected Areas Support to Land Legal Status Regularization Recovery of 1,200 HA of Degraded Land The Nature Conservancy Brazil- TNC State of Para Environmet Secretary Support to Public Management in Mato Grosso State Support to Descentralization of Environment Secretary of The State of Para Total investment: US$ 60 million 24

25 Brazil Energy Matrix Brazil: 45% renewable sources World average: 13% Developed countries average: 6% Firewood: 14.2% Nuclear: 1.5% Hydroenergy: 12.9% Sugarcane 15.1% Other: 2.4% Oil 37.2% Coal: 7.8% Natural Gas 8.8% Source: Mining and Energy Ministry (Brazil, 2008) 25

26 Potencial to Explore Renewables Total Hydro Power Potencial in use Peru China India Brazil Canada USA Norway Germany France Source : IEA (2008) % 26

27 Wind Energy BNDES support 17 eolic plants Total investment: US$ 609 million 27

28 Biodiesel- BNDES support 10 biodiesel projects Total investment: US$ 262 million Capacity: 1.1 billion litres/year 28

29 Bioethanol: BNDES disbursements US$ billion 114 projects: 8 billion litres Portfolio: 70 projects

30 2nd Generation Ethanol EISA Energy Independence and Security Act of 2007 of USA Congress: the total amount of biofuels added to gasoline is required to increase to 136 billion litres by 2022, from 17.7 billion litres in billion litres of the 2022 total must be derived from non-cornstarch products 2nd generation Biofuel extend the amount of biofuel that can be produced sustainably by using biomass consisting of the residual non-food parts of current crops 2nd generation Ethanol: The second generation ethanol can be obtained from bagasse and cane straw BNDES and FINEP (Federal Technology Financing Agency) will jointly fund research projects Reduction of Environmental impact: reduced land use, less competition with crops 30

31 Thank you.