Restructuring Brazil’s sovereign debt framework to incorporate climate considerations can free up fiscal space for resilience investments, align repayment terms with its sustainable development goals, and mobilize low-interest resources to support long-term adaptation.
• Consolidate Brazil’s sovereign debt architecture into a credible and scalable vehicle to finance green investments at the national level. • Issue a steady pipeline of sustainability bonds aligned with the Sustainable Bond Framework. • Establish sovereign ESG asset classes that attract long-term institutional investors. • Develop national frameworks (e.g., CEAs - Environmental Economic Accounts) to strengthen environmental fiscal reporting.
Moderate Progress
Brazil has established a sovereign sustainable finance architecture, with bond issuances signaling commitment to mobilizing climate-aligned capital. Progress is steady, but scaling to meet 2030 goals will require larger volumes and deeper market integration. The Sovereign Sustainable Bond Framework, launched in 2023, is governed by the Sovereign Sustainable Finance Committee chaired by the National Treasury. Two sovereign sustainability bonds totaling US$ 4 billion were issued in November 2023 and June 2024, financing climate-resilient and socially inclusive projects. The Brazilian Development Bank is leading the creation of a sustainable certification platform, targeting US$ 20 billion in mobilized investments ahead of COP30.
Cooperation is required between these actors and audiences to drive progress foward in Sovereign Debt Architecture.
Showcasing the key reform milestones for Sovereign Debt Architecture that have been addressed at global events.
New York, US
Institutionalize the national environmental accounts (CEA), embedding them into Brazil’s fiscal and financial governance frameworks
Improve affordability and accessibility of insurance for underserved producers in the North and Northeast via public-private partnerships and premium support.
TBC
Diversify debt coverage and financing models, balancing government-backed instruments with scalable private participation to mobilize blended capital
Discuss the implementation of energy efficiency and fuel-switching measures in transport and industry to stay within Brazil’s allocated carbon budget.
Washington DC, US
Announce and operationalize a medium-term sovereign bond pipeline and emissions calendar to provide long-term visibility and strengthen investor confidence
Create domestic legal standards for CRDC triggers, disaster definitions, and verification protocols, ensuring credibility and investor confidence
Brasilia, Brazil
Strengthen coordination between federal and subnational governments, aligning climate finance strategies and ensuring consistency across project pipelines
Design CRDC models tailored to Brazil’s eligibility constraints, enabling access despite exclusion from SIDS and low-income country–focused programs
Publications and educational material to deepen understanding of Sovereign Debt Architecture.
Press release announcing the creation of the Sovereign Sustainable Finance Committee to coordinate Brazil’s green bond agenda.
Feature article highlighting Brazil’s Sovereign Sustainable Bond, emphasizing its role in financing a greener and more inclusive economy.
Framework outlining guidelines for Brazil’s Sovereign Sustainable Bonds, including eligible expenditures and reporting commitments.
Case studies on the use of environmental-economic accounts to integrate ecosystem services into public policy and decision-making.