New Ökoinvest round is looking for USD 1.5 billion for land restorations | agriculture

Officials from the Ministry of Agriculture estimate that the auction will take place until June. The results are expected to be ratified within 45 days, with the funds being paid out in early August. The ministry endeavors to make concrete progress in the program in the Cop30 Climit Summit in Belém in November and is currently working with the business team to accelerate the process.

According to the auction regulations, financial institutions will compete in order to operate foreign capital loans that were included by the Ecoinvest initiative. In return, you have to offer suitable contributions and provide currency security guarantees. The most important selection criterion will be the leverage ratio – like many of its own means that the banks will sign in addition to the capital they attract them from abroad.

The ratio of minimum contracts is published in the call for offers. The government expects it to mobilize 1 billion US dollars of foreign capital and 500 million US dollars from domestic financial institutions. According to a source of the Ministry of Agriculture, banks pay the National Ministry of Finance a fee of 1% for the proportion of public capital, which is the smallest part of overall financing. The entire financial risk is borne by the credit institution.

Officials still have to determine the final interest rate that is burdened by the farmers. The original goal was to limit the interest rate to 6.5% annually, but this goal has been dropped since then due to the increase in Brazil -Benchmark petrol rate, the Selic. The ministry recently recognized that the tariffs could increase to 8%, but some expect them to continue to rise.

A source said that the Selic rate is the “minimum return” expected by banks, which Ökoinvest loans could make more expensive than originally projected. As a result, interest rates could exceed the currently offered interest rates on the existing pasture line of the pasture plan of the harvest plan, which calculates 7% per year. According to an insider, the 2 billion R $ assigned this season this season was exhausted within 30 days.

Last week, the National Woneary Council (CMN) approved a resolution in which new rules for the Blended Finance line from Ecoinvest, which will finance the program of the willow conversion, were determined.

The changes expand the types of financial instruments with which funds such as investment fund shares (including Fiagros) as well as structured products such as agribusiness certificates (CRA) and rural product calculations (CPR) can pay off.

These updates not only support the upcoming auction for the recovery of the pasture, but also provide the foundation for future eco -finish auctions on other sustainable initiatives. The adjustments aim to align the program of credit agents that are known to rural manufacturers. Financing can also be offered by traditional rural credit lines.

With the new rules, small farmers can access the recovery of pasture access to Blended Finance Finance, without losing the authorization for Pronaf, the Brazilian national program to strengthen family breeding. According to the CMN resolution, loans that were issued by this auction can have a grace of up to three years from the two previous two -a change that is coordinated with the goals of the Ministry of Agriculture.

The announcement follows months of negotiations in Brasília, in which the Ministry of Agriculture was expressed by the frustration of delays in the organization of the auction. Ecoinvest is currently the only practical instrument that was identified by the ministry to attract external capital at affordable prices for the national program of Brazil to convert degraded pastures into sustainable agricultural and forest systems (PNCPD).

In the upcoming offers, the requirements for the authorization are described, including credit limits based on the producer profile, interest rates, the repayment conditions and the environmental conformity standards.

The National Ministry of Finance rejected a statement.