World Bank Grants $1.3 Billion Loan to Support Environment, Sustainable Resource Use in Brazil

By on Mar 31st, 2009.
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World Bank Grants $1.3 Billion Loan to Support Environment, Sustainable Resource Use in Brazil Supporting the Brazilian government’s climate change action plans and environmental conservation efforts, the World Bank on March 25 announced it had approved a $1.3 billion environmental development policy loan facility, one of the largest of its kind ever made.

Brazil is home to more than 1/3 of the world’s tropical rain forests, its largest freshwater reservoir (accounting for 20% of the world total), and savanna ecosystems with the greatest biodiversity on Earth. On the other hand, extracting natural resources play a large role in Brazil’s economy, threatening the environment and the resources that support the Brazilian society and economy.

“Brazil is an environmental superpower, and this also means that it faces major challenges to reverse a trend of unsustainable use of its natural resources. This is especially true in the context of the international financial crisis and its possible environmental and social impacts,” Makhtar Diop, the World Bank’s country director for Brazil, stated in a media release.

“Brazil has recognized that the social and economic costs of environmental destruction are high. Smooth coordination of policies and procedures within the Brazilian environmental management system, combined with an increased commitment from the financial sector to long-term sustainability, are key to guaranteeing that specific actions and investments in the area can achieve growth that is environmentally sustainable and socially inclusive,”

Supporting Better Environmental Management and Resource Use

Some 19,000 square kilometers (7,500 square miles) of Amazon rain forest has been cut down each year over the past 30 years, according to the World Bank, accounting for 70% of Brazil’s CO2 emissions. Deforestation has led to massive soil erosion and degradation and the loss of valuable biodiversity. Economic trends, such as globalization, weak property rights and poor regulatory enforcement exacerbate these trends and create the conditions that enable them to continue.

The Brazilian government has been making a concerted effort to improve and strengthen its environmental and natural resource management strategy and capabilities in recent years. The Amazon Protected Areas Program, which aims to protect biodiversity over a 50-million hectare area of the Amazon region by 2013– is now established, the World Bank notes.

With the $1.3 billion Development Policy Loan Facility and working in partnership with the Brazilian Development Bank (BNDES) and the private sector, the World Bank hopes to help the Brazilians with their own efforts to establish a model for sustainable natural resource use that can be replicated in other countries rich in natural resources but threatened by environmental degradation.

The underlying strategy and disbursement of loan facility funds is based on an integrated “multi-sector” approach to management and development of Brazil’s rich resource base. Significantly, the loan facility aims to bring government and the private sector together to address problems and challenges to do with sustainable forestry, land use, water, energy and mineral resource development, as well as sanitation.

Recently, the World Bank’s has been working in advisory capacity with the Brazilian government and private sector to develop its clean energy sector, including development of hydro-electric power, sustainable biofuels and fostering a low carbon society.

You can check out more in a video presentation with country director Diop and other World Bank Group officials working with Brazil via this hyperlink.

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