7 February 2023
Promoter – Financial Intermediary
VINCI INFRAESTRUTURA GESTORA DE RECURSOS LTDA
The project concerns an equity fund targeting investments in climate action infrastructure in Brazil. More specifically, the Fund will provide equity and quasi-equity primarily to renewable energy (including enabling infrastructure) and sanitation projects.
Additionality and Impact
EIB's investment supports a Fund Manager in raising an investment fund, which will address a significant market gap with regards to climate change projects aiming at a lower carbon economy in Brazil. The Fund will invest in projects and companies predominantly active in the sectors of clean energy, water and wastewater, as well as energy efficiency.
Through an investment in the Fund, the EIB will i) address the market gap related to the scarcity of capital for generation of clean energy, access to safe water and sanitation, ii) support an experienced and impact focused Fund Manager to further build out its investment programme of commercially viable projects, iii) help attracting new investors to the Fund, and (iv) help the Fund to reach an adequate first close size and start to deploy capital on the ground. As a consequence, it addresses the market failure of negative climate and environmental externalities.
The operation will contribute to EU policy goals, meet the Bank's priority objectives in climate action and environment, and support three areas of focus of the European Commission's assistance programme (Private Sector Development, Environment and Climate Change and Energy).
It will also contribute to the European Commission's Global Gateway strategy and the European Green Deal.
The equity participation by the EIB is considered crucial to (i) achieve the target fund size of USD 400m, (ii) confirm the EIB's position as a leading fund investor in climate action and environmental sustainability projects in Latam, (iii) support the Fund Manager in attracting additional capital, expanding the investor base, notably by crowding in European DFIs and institutional investors to reach a meaningful first closing.
The aim is to promote climate action and environmental sustainability, and, therefore, will support the achievement of the sustainable development goals (SDGs), particularly SDG 13 (Climate Action), SDG 7 (Affordable and Clean Energy) and SDG 6 (Clean Water and Sanitation).
- Electricity, gas, steam and air conditioning supply
- Water supply; sewerage, waste management and remediation activities
Proposed EIB finance (Approximate amount)
USD 55 million (EUR 51 million)
Total cost (Approximate amount)
USD 400 million (EUR 369 million)
Details of the fund's environmental and social due diligence procedures for ensuring compliance with national legislation, the principles and standards of relevant EU legislation and EIB's Environmental and Social Standards as well as the capacity of the fund manager to assess and monitor environmental and social risks and impacts, will be reviewed during appraisal.
The Fund will be required to develop an environmental and social policy and establish the appropriate management systems to comply with the EIB's environmental and social requirements. The assessment of the environmental and social impacts and risks will be part of the standard due diligence process that the Fund will have to carry out for each underlying investment, thereby ensuring that the portfolio and these investments are in compliance with national law and in line with the principles and standards of relevant EU environmental legislation as well as the EIB's Environmental and Social Standards.
The EIB will require the fund manager to take all requisite measures to ensure that contracts for implementation of the projects financed by the fund are tendered in line with the EIB's Guide to Procurement.
Signed - 10/08/2023