Capacity-building for energy efficiency financing with local banks in Brazil

Green Finance

It is estimated that 48% of Brazil’s energy efficiency potential lies in the industrial sector. Significant investments are required to unlock this potential. Yet, an assessment conducted by UNIDO and Carbon Trust in 2018 identified several barriers which prevent the increase of the rate of investment in industrial energy efficiency in Brazil. Financial institutions’ risk perception is a significant hurdle, which may be due to the lacking capacities in the area of energy efficiency.

In order to advance the required capacity-building measures in Brazilian banks, adelphi teamed up with the Brazilian organisation SITAWI Finance for Good. The project aimed to reduce the risk perceptions held by Brazilian banks vis-à-vis energy efficiency projects and thus improve the finance-ability of such projects. This project was implemented within the framework of the Industrial Energy Accelerator (IEA). This multi-stakeholder partnership is lead by UNIDO and Carbon Trust, and is part of the platform Sustainable Energy for All (SEforAll). The objective of this platform is to ensure that the global energy efficiency potential is fully used until 2030. In particular, the IEEA aims to unlock substantial investments in industrial energy efficiency, reduce emissions in the short- and long-term, and improve industrial productivity.

As part of this project, adelphi and SITAWI developed trainings for technical bank staff. In particular, staff working in credit risk analysis were to be empowered to identify and analyse the risks associated with energy efficiency projects, and subsequently implement potential mitigation measures.