The Global Innovation Lab for Climate Finance (the Lab - Global Innovation Laboratory for Climate Finance) selected six new climate financial instruments for its 2021 acceleration program. Two of them are from Brazil, including the Guarantee Fund for Biogas Projects ( Guarantee Fund for Biogas Projects).

Presented by the Brazilian Biogas Association (ABiogás), the Biogas Guarantee Fund aims to provide financial guarantees required by private banks and, with that, unlock approximately US $ 100 million in investments, a volume that can finance 10 to 30 projects.

The selected ideas will undergo a seven-month period of analysis, stress testing, development and preparation for launch later this year. Entrepreneurs will receive guidance and support from leaders in the public and private sectors, who contribute their experience, political capital and financial capital to the instruments.

The idea of the Guarantee Fund for Biogas Projects was put for the first time in the National Plan for Biogas and Biomethane (PNBB), prepared by ABiogás in 2014. According to the president of ABiogás, Alessandro Gardemann, one of the great challenges for raising funds for biogas projects is the high guarantee requested by financial institutions. For this reason, ABiogás presented the proposal to create a guarantee fund to reduce the risk of banks and increase access to credit.

“The great challenge of biogas in this new phase is to structure and guarantee the project during the two years of construction. ABiogás' objective, when submitting the proposal to the Lab, is to structure a project guarantee fund that is technically well-founded to leverage, implement and develop projects with technical and economic feasibility. Resources exist, what is missing is to show the market what biogas can do, how it can do it and provide the necessary guarantees. I believe that when investors see that there is already more than R $ 700 million invested, and that the technical capacity is proven and mature, these potential resources will be used ”, explained Alessandro Gardemann.

The second Brazilian project selected is the Amazonia Sustainable Supply Chains. Proposed by Mauá Capital, it offers advance financing for suppliers of inputs in sustainable value chains in the Amazon.

"The Lab, in our view, is a crucial institution for the development of new financial instruments that face the climate and sustainability challenges in the country. The Ministry of Economy hopes that the selected instruments will contribute to attracting private resources to promote a green economic recovery. sustainable after the pandemic COVID-19. The exceptional work that the Lab does helps to expand the involvement of stakeholders in Brazil to reach our NDCs, ”said Lab member Gustavo Fontenele, coordinator of green economics at the Ministry of Economy.

The Lab is an initiative led by investors that identifies, develops and launches promising solutions to direct public and private investments that are critical to action on climate change in developing economies. The Lab's annual competition selects promising early-stage ideas for sustainable investment and rapidly develops those ideas into scalable and financeable investments and business models.

In its seventh year, the Lab prioritized instruments that can attract sustainable investments and create opportunities for a post-COVID-19 green economic recovery.

“Our job is to enable a truly sustainable economic transition while the world is recovering from the pandemic. The new class at the Lab presents a set of innovative instruments capable of directing private resources to rebuild an inclusive, sustainable and resilient economy, ”said Dr. Barbara Buchner, global director general of the Climate Policy Initiative, who coordinates the Lab.

Since its creation in 2014, the Lab has become a leader in accelerating investments where it is most needed, having launched 49 financial instruments that have already mobilized USD 2.4 billion for concrete projects in emerging economies. This includes USD 370 million invested by Lab members - which include more than 70 government, development finance, philanthropy and private sector institutions - as well as USD 2 billion in additional investors.

Lab members chose 2021 ideas from a highly competitive list of 160 proposals submitted by leading development finance institutions, global NGOs, prominent project developers, asset managers and financial services companies, and entrepreneurs.

About ABiogás 

The Brazilian Biogas Association (ABiogás) was born in 2013 and today has almost 80 member companies that represent all sectors of the biogas production chain, from production to commercial use. With responsibility in acting with the competent bodies and a commitment to the disclosure of relevant information, ABiogás's mission is to expand the use of biogas in the Brazilian energy matrix and develop the biogas market, promoting the sustainable energy recovery of waste.

About the Lab 

The Global Innovation Lab for Climate Finance identifies, develops and launches innovative financial instruments that can direct billions of dollars in private investments to mitigate and adapt to climate change and sustainable development. The Lab is funded by Bloomberg Philanthropies, the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), the Netherlands Ministry of Foreign Affairs, the Rockefeller Foundation, the Swedish International Development Cooperation Agency (AIDS ) and the UK Department of Business, Energy and Industrial Strategy. Climate Policy Initiative coordinates the Lab.