BNDES should create credit line for climate losses and damages

The National Bank for Economic and Social Development (BNDES) needs to create special credit lines for losses and damages caused by climate change, said the director of Planning and Project Structuring, Nelson Barbosa (in the picture). During a global event on climate finance, which brought together representatives from development banks and representatives from G20 governments, he defended a credit line for the reconstruction of Rio Grande do Sul.

“At this moment, we face a new challenge due to the climate events in Rio Grande do Sul, which will require a special line of credit for reconstruction. We already have lines for mitigation and adaptation, now we also have to think about lines to take care of losses and damages”, highlighted the bank director.

Barbosa stated that, with the new reality, development banks will also have to face other realities of extreme climate events, such as dealing with the effects of climate refugees.

“The volume of resources involved and the time required make more direct government participation inevitable,” said Barbosa. “BNDES will fulfill its role of assisting the Ministry of Finance and other regional authorities in this reconstruction.

Barbosa recalled that BNDES already manages the Climate Fund, maintained with resources from the Union, to finance the climate transition in the country, with subsidized interest. Today the fund has US$2 billion (around R$10 billion).

According to the Secretary of International Affairs at the Ministry of Finance, Tatiana Rosito, the amount needed to deal with climate change has been discussed for years.

“We know we will have to go from billions to trillions. The diagnosis is very clear, we have to advance the best ways of dealing with risk sharing and connecting different institutions, local or global, national or subnational, and bringing together public and private resources to reach the scale we need”.

Rosito also highlighted the role that multilateral development banks will have in this scenario.