Currency risk is an ongoing barrier to international climate finance flows in Brazil, as projects need to create greater returns to cover the uncertainty of exchange rate shifts.
Develop affordable long-tenor exchange hedging products tailored to the life cycles of renewable, adaptation, and NbS projects, ensuring financial predictability over 10–20 years
Embed foreign exchange risk evaluation and mitigation requirements into climate finance disclosure, ESG scoring, and investment appraisal standards across the Brazilian private sector.
Moderate Progress
Brazil is expanding hedging mechanisms to reduce currency risk in climate finance, but instruments remain limited in scale. Broader adoption will be critical to mobilize larger volumes of foreign capital into renewable energy, infrastructure, and nature-based projects.
Major banks such as Itaú BBA, Bradesco, and Santander provide currency swaps and forwards to renewable energy developers, forest restoration firms, and sustainable infrastructure concessions reliant on foreign loans.
Multilateral institutions including IDB Invest, the International Finance Corporation, and the Green Climate Fund structure Brazilian real–denominated or exchange-hedged loans to reduce exposure for private sponsors.
Eco Invest Brazil demonstrates how foreign exchange hedging can unlock international climate capital, serving as a flagship case recognized internationally.
Cooperation is required between these actors and audiences to drive progress foward in Mitigating Currency Risk.
Showcasing the key reform milestones for Mitigating Currency Risk that have been addressed at global events.
New York, US
Deploy MDB- and DFI-backed blended finance structures focused on early-stage renewable technologies and grid modernization.
Deepen investor interfaces: public data rooms, template contracts, and regular market-soundings to accelerate private due diligence and lower bid uncertainty
TBC
Lower the cost of currency hedging through interest rate convergence and financial innovation, enabling access to foreign capital for smaller-scale private climate projects.
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
Deepen long-tenor BRL markets to facilitate 15–20 year financing for renewables, and adaptation projects without exposure to foreign exchange risk.
Develop granular, localized climate and hydrological data to support actuarial modeling, enhance product design, and reduce pricing volatility.
Brasilia, Brazil
Generate and disclose robust data on Foreign exchange exposure and mitigation pathways in Brazilian climate deals to support investor decision-making and credit approvals.
Develop and scale business models for adaptation with measurable ROI, enabling private-sector participation through clear revenue streams or cost savings
Publications and educational material to deepen understanding of Mitigating Currency Risk.
Technical guidance on managing exchange rate risk to de-risk climate investments globally.
Study proposing strategies to manage currency risk and unlock climate finance in Brazil.
No Progress
Moderate Progress
No Progress
Moderate Progress
Moderate Progress
No Progress