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IFC Explores Opportunities for Sustainable Energy Finance in Brazil


In Peru:
Clara Ugarte Perrin
Telephone: +51-1-611-2501
E-mail: cugarteperrin@ifc.org


Sao Paulo, Brazil, October 5, 2010—IFC, member of the World Bank Group, unveiled a study demonstrating ways to boost renewable-energy and energy-efficiency activities in Brazil, potentially producing nearly $770 million in annual cost savings.

The new market study finds that there is a strong potential to improve the use of energy, especially in commercial and public buildings, which utilize more than 80% of Brazil’s total electricity, mostly for air conditioning, refrigeration, lighting, and motors. The energy savings potential is approximately 5,500 GWh/year, resulting in annual cost savings of close to $450 million per year. Seeing that potential materialize would require $800 million in financing.

The study also identified significant opportunities in the industrial sector, and in particular the food and beverage, pulp and paper, chemical and ceramics subsectors, where energy-efficiency measures could save approximately 6,000 GWh/year, or $320 million in cost savings in these subsectors alone.

“Brazil is the second largest releaser of greenhouse gas emissions in the region. We are identifying ways to reduce these emissions through energy efficiency, renewable energy, and cleaner production initiatives,” said IFC Senior Operations Officer Daniel Shepherd. “However, the availability of commercial financing is limited; local banks traditionally have not recognized investments in sustainable energy as a business opportunity that can be provided systematically. This is where IFC can play a critical role.”

The market study, conducted by Econoler, an international consulting firm specializing in energy-efficiency projects, also recognized that Brazil is a regional leader in biofuels, hydroelectric, sugarcane cogeneration, and wind-energy projects. The study found that there may be more opportunities related to municipal solid waste and alternative biomass energy. That is especially pertinent in the Amazon area, where numerous saw-mills generate waste that could be used to produce electricity.

Results of the study were presented today in a workshop with representatives of Brazil’s main financial institutions, which are interested in expanding into sustainable energy finance.

IFC has successfully developed sustainable energy projects with financial institutions in emerging markets over the last decade. IFC's overall strategy for abatement of greenhouse gas emissions focuses on building the capacity of financial intermediaries to offer products for renewable-energy and energy-efficiency projects.  

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit www.ifc.org.