Financing operation between the National Bank for Economic and Social Development (BNDES) and Neoenergia, signed on December 27, 2021, received the first certification of green loans for energy transmission projects from renewable sources in Brazil. The title refers to the project for the implementation of more than 1,100 kilometers of transmission lines between the states of Paraná and Santa Catarina, which aim to transfer low-carbon energy, as well as increase the security of energy supply in the respective states. The certification is in line with the Green Loan Principles (GLP) and good market practices for capturing green loans.

The opinion that certified the operation was prepared by the NINT Group, a social organization of public interest that carries out a positive socio-environmental impact assessment through the development of financial solutions that incorporate socio-environmental issues in the strategy, risk management and investment evaluation.

"The Vale do Itajaí Project is an example of a partnership between BNDES and Neoenergia in building a recognized sustainable and resilient future for the sector. The certification of projects is an important step towards that", said Alexandre Siciliano, Head of the Department of BNDES Electric Energy.

The NINT Group assessment covered aspects such as resource management and use, project selection process, and alignment with the GLP. BNDES financing is associated with the availability of affordable and clean energy and the mitigation of the effects of global climate change. The initiative also contributes to the increase in the transmission of renewable energy in the South region.

The report that certified the operation praised, for example, the transparency of the information contained in Neoenergia's annual report on financial and socio-environmental impact indicators. In addition, there were positive mentions of the methodology for assessing climate risks, the operation being based on the company's Green Finance Framework and the existence of early maturity mechanisms in the event of a change in the use of funds.

"Neoenergia plays an important role in the sustainable development of the Brazilian electricity sector, generating value for society. The certification of green financing reinforces our commitment to executing projects with transparency and responsible environmental practices towards a balanced transition to a low carbon economy" , says Leonardo Gadelha, Executive Director of Finance and Investor Relations at Neoenergia.

Among the company's goals for 2030 is to place the intensity of emissions below 50 grams of CO2 per kWh generated, aiming to achieve carbon neutrality in 2050.

Green loans are financing aimed at sustainable activities, with the responsible use of natural resources. Access to this resource is based on the development of productive activities with concern for the environment and people's well-being. A green loan can also be used to implement new production techniques that are more ecological and sustainable compared to the previous process.

"With this current certification, BNDES maintains its pioneering spirit in the sustainable bond market. We had already been the first Brazilian bank to issue a Green Bond in the international capital market, and the first financial institution to issue green financial bills, in the local market", highlights Daniel Barreto, Superintendent of the Energy Area at BNDES.

About the operation – BNDES will finance the implementation of 1,100 kilometers of transmission lines in Paraná and Santa Catarina. The proponent of the transaction is the Special Purpose Society Neoenergia Vale do Itajaí Transmissão de Energia, controlled by Neoenergia S.A. BNDES support is worth R$ 1.3 billion. It is estimated that the construction of these transmission lines will generate 2,691 direct jobs.

Green Loan Principles – This is a loan instrument to finance projects that bring social and environmental benefits. The GLPs are a set of voluntary guidelines, which provide a framework for clarifying under what circumstances a loan can be considered green, and which were developed by representatives of the main financial institutions active in the global syndicated loan market. There are four main components of green loans: (i) use of proceeds; (ii) process for project evaluation and selection; (iii) management of proceeds and (iv) reporting. Examples of LPG are initiatives aimed at mitigating climate change, conserving biodiversity and preserving natural resources, and preventing and controlling pollution.