The European Bank for Reconstruction and Development (EBRD) wants to partner with Brazilian banks to help fund energy efficiency projects in Brazil. Josué Tanaka, EBRD Managing Director for Operational Strategy and Planning, Energy Efficiency and Climate Change, was in Brazil recently to work out details of the partnership.

The National Bank for Economic and Social Development (BNDES) will be the main Brazilian partner in the initiative, which should also be extended to commercial banks in the country. “Since there are a large number of small and mid-range projects, commercial banks are ideally suited because of their far-reaching presence among businesses,” Tanaka explained. At least eight financial institutions are targeted by EBRD at the moment.

According to Tanaka, Brazil is well-positioned in terms of renewable energies, chiefly thanks to a power system largely reliant on hydroelectric energy. However, when it comes to energy efficiency, there is still a lot of room to improve. “We realized that the demand [in this area] has grown largely in recent times, with energy availability issues emerging from unfavorable weather conditions, and energy costs expected to rise. So we believe that businesses will increasingly seek to mitigate their energy costs,” he pointed out.

The challenge now is to understand how the EBRD model will work out for the country's unique characteristics. “We want to find out to what extent the model we have developed can be applied to Brazil, what needs adjusting, and how compelling this kind of funding will be to banks,” Tanaka said.

During the fourth edition of the Global Green Growth Forum held on Monday and Tuesday (Oct. 20-21) in Copenhagen, Denmark, EBRD President Suma Chakrabarti told Agência Brasil that “the companies that invest in energy efficiency reduce their costs, become more competitive and, most importantly, help slow down climate change.” He reported that one third of EBRD's current projects are focused on the theme, with 700 projects developed since 2006 and total investments exceeding $15 billion.

In the energy efficiency model currently adopted by the bank, businesses have to undergo to an external audit to establish what kind of project can be rolled out and calculate the financial return on investment. Then, they are ready to apply for funding with the bank. Tanaka believes that once Brazilian banks have shown an interest, funding for projects in energy efficiency can be made available as early as in the first half of 2015.