Minister signs memorandum to issue green bonds for agriculture

Minister Tereza Cristina (Agriculture, Livestock and Supply) signed, this Thursday (21), the memorandum of understanding with the non-governmental organization Climate Bonds Initiative (CBI) for the development of the green bond market in the Brazilian agricultural sector. With this act, the Ministry of Agriculture seeks to stimulate new sources of financing for Brazilian agriculture, promoting sustainable practices and technologies.

This type of initiative is possible with the issuance of the Agro Provisional Measure (MP 897/2019), which establishes mechanisms for investment in the Brazilian rural sector. The MP is being processed in Congress. “This provisional measure will also contribute to intensifying the green finance segment in Brazil, with emphasis on investments in Green and Climate Bonds”, said the minister, in a speech at the meeting on investment opportunities in Brazilian agriculture, in New York.

According to data from the Climate Bonds Initiative and Green Bond Data, last year, US$167 billion in green bonds were invested. The minister cited a plant in São Paulo that will be the first company in the world to issue certified green debt bonds for bioenergy. It is planned to issue around US$50 million agribusiness receivable bonds (CRA), certified by the CBI, which should attract investors interested in increasing their participation in clean projects.

“The Ministry wants to promote this agenda. The memorandum of understanding with the Climate Bonds Initiative will certainly bring important results for the segment”, stated the minister.

At the meeting, Tereza Cristina presented the improvements adopted in the Brazilian agricultural sector with the edition of the Agro MP. Among them, the possibility of issuing bonds in foreign currency to non-resident investors, which makes investing in Brazil easier. For the minister, there is “huge potential for this type of investment” in Brazil.

“I reinforce the government's commitment to continue promoting a healthy business environment, with the simplification of bureaucracy, greater ease of access to credit, improvement of infrastructure and attention to the needs of rural producers, regardless of their size”, he stated.

After citing agreements that have been negotiated by the Brazilian government with other countries and economic blocs, the minister said that Mapa works to expand the participation of Brazilian agriculture in the world. She also highlighted that the Ministry of Agriculture is open to partnerships that contribute to achieving this purpose.

“I am confident that, together, we will continue to build an agricultural sector that brings prosperity to the entire Brazilian society and to our partners around the world”, said Tereza Cristina, adding that the country seeks to build “an innovative, dynamic, profitable and sustainable.”

Green Bonds

Green bonds are debt securities that can only be used to implement or refinance sustainable investments, capable of bringing benefits to the environment and contributing to mitigating the effects of climate change. When choosing to issue green bonds, the company must prove that the project generates positive environmental impacts.

Among the securities that fit these parameters are debentures, infrastructure debentures, Agribusiness Receivables Certificate (CRA), Real Estate Receivables Certificate (CRI) and Credit Rights Investment Fund Shares (FIDC).