Brazil

Consulting services for assessing the design and preparation of Caxia Econômica Federal’s program to promote EE in Brazil

EXPERTISE : , Financing Mechanisms
SECTOR : , Industrial

Client

KfW Bankengruppe

projeCt Description

The Federal Republic of Germany is one of Brazil’s major cooperative partners in climate change mitigation and biodiversity conservation. Germany and Brazil cooperate not only in high-priority areas, such as protection of the environment and natural resources, but also in the energy sector, with emphasis on promoting renewable energy (RE) and improving energy efficiency (EE).

Although EE investments can offer valuable cost-saving opportunities and attractive rates of return for Brazil, most of these potential investment opportunities are neglected or receive little attention due to a number of barriers. To overcome these barriers, KfW and Caixa Economica Federal (Caixa) are collaborating on the development of a program to promote EE with a focus on industrial companies. The program includes:

  • A credit line of up to EUR 150 million
  • Tailored technical assistance worth up to EUR 4.5 million for Caixa as well as its clients

The goal of this program is to enable Caixa to set up a viable and effective financing mechanism for financing EE investments in private companies to help them reduce their energy consumption by adopting technologies, such as heat recovery systems, cogeneration, energy-efficient motors, absorption units, refrigeration systems and photovoltaic systems, etc.

 

Highlights

Analysis of the EE market in Brazil, including:

  • Analyzing the EE market potential;
  • Identifying the barriers
  • Evaluating local EE service providers
  • Analyzing the EE financing products available and comparing them with Caixa’s financing products.

Detailed analysis of Caixa Economica Federal:

  • Detailed analysis of its various aspects, including: organizational, governance, marketing, financial, human resources and risk management;
  • Analysis of Caixa’s current clients and loan portfolio with a focus on their potential for EE investments;
  • Detailed assessment of its capacity to successfully implement an EE loan program;
  • Analysis of the activities necessary for integrating the new EE credit line.

Justifying the selection of the target market sectors by considering the EE market study findings and Caixa’s current client portfolio. The objective is to make an estimate of the EE market potential by providing enough details on a range of factors, including the specific individual sectors, relevant and applicable technologies, and client profiles.

Detailed design of an EE credit line for Caixa, by covering such aspects as the target market, eligibility criteria, financial terms and conditions, relevant project financial parameters and the monitoring and evaluation system.

Detailed design of the technical assistance (TA) package, which is critical to the implementation of EE financing products for Caixa and its clients.

The scope and level of TA will depend largely on two factors: Caixa’s capacity to develop and implement EE financing and the market players’ capacity to develop bankable EE projects and seek financing for these projects.

 

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