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Intermediated framework loan to Banco Santander (Brasil) S.A., one of the largest banks in the country, to finance solar energy investments.
By supporting investments into solar photovoltaic schemes, the project is expected to contribute to the EIB priority objectives for energy sector lending related to renewable energy sources, in line with the EIB Energy Lending Criteria and its Climate Action objectives. The operation is well aligned with the United Nations Sustainable Development Goals 7 (Affordable and Clean Energy) and 13 (Climate Action).
This operation will finance 100% Climate Action investments in solar photovoltaic schemes across Brazil, by providing a loan to the country's third largest private bank (Financial Intermediary) with a countrywide presence and adequate capabilities to implement the operations in Brazil's current challenging operating environment.
This operation will enable investments into renewable energy, leading to carbon emission and air pollution reductions by promoting additional renewable generation capacity. It is therefore strongly aligned with EU priorities in Brazil (particularly the Green Deal Team Europe Initiative for Brazil and its Sub-Initiative on Sustainable and Smart Cities) as well as with Brazil's Intended Nationally determined Contribution under the Paris Agreement, while addressing the existing failures of the energy market, namely negative environmental externalities and incomplete markets.
The EIB's financing offers both financial and non-financial benefits to the Financial Intermediary, including flexibility to choose at disbursement both the currency (EUR/USD) as well as between a fixed and variable interest rate. By financing only up to 50% of the underlying projects, the EIB's participation will help crowd in significant capital from the private sector, diversifying the counterpart's funding mix and channelling funds to investments into renewable energy production capacities.
The operation will generate environmental benefits by supporting renewable energy investments in solar photovoltaic schemes that help mitigate climate change.
The financial intermediary will be required to take all the requisite measures to ensure that the procurement procedures are carried out in accordance with the Bank's Guide to Procurement.