How to attract investments to maintain natural resources considered an asset, that is, a valuable good? This was the theme of the panel "Mobilizing private capital for the development of green assets" held during the Infrastructure WG meeting in Foz do Iguaçu, in the Brazilian state of Paraná.
During the 3rd Meeting of the Infrastructure Working Group, which concluded on June 27 in Foz do Iguaçu, in the Brazilian state of Paraná, a panel titled "Mobilizing private capital for the development of green assets" discussed ways to stimulate resources from the public and private sectors for both maintaining green spaces in cities, which helps to improve air quality, and for the construction of new infrastructure projects adapted to climate change.
Ana Luci Grizzi, Partner at EY Brasil and LATAM Vice-Leader of Sustainability and Climate Change, used the example of the carbon market, which, in her view, is stagnating. "When we talk about connecting parks to each other, there are spaces in the middle that we won't have private parks to implement because they're in areas that aren't as attractive for building a market, like the Amazon for example," she stated.
In response to these observations, Luciene Machado, deputy managing director of the National Bank for Social Development (Banco Nacional de Desenvolvimento Social /BNDES), noted that public-private partnerships are being tested and that it is necessary to choose infrastructure projects that can really be replicated. "We have only just begun to deal with this kind of situation, and we are working to reduce the risks. There is a very wide range of solutions but only a few can be applied safely," she pondered.
North American experience
Many natural resources in the United States are maintained using public funds. The New York Botanical Garden, founded in 1891, naturally preserves part of the city and offers quality leisure for residents and tourists. It is also a place of research, with over 550,000 books and 7 million cataloged species. To maintain this structure of more than one million square meters, the garden receives funding from the New York City Department of Cultural Affairs. But the space is managed by private initiative.
Kurt Forsgren, managing director of S&P Global Rating, made remarks on the Botanical Garden to address how the partnership between local or national governments and private initiative can be successful for the creation and conservation of infrastructure that contributes to nature and people's quality of life.
Forsgren provided a brief commentary on the process of granting credit concessions for green initiatives. "We focus a lot on what the risk of climate change is and how that impacts on business, especially in the credit market," he explained. In order to grant credit to a foundation for the management of a green asset, certain criteria must be met, for example: the foundation's management, its financial stability, its risk management, whether it has debts and how it invests its capital in the long term.
The Infrastructure Working Group is debating the identification of innovative instruments for mobilizing financial resources for investments. Recently, the WG has been addressing how to increase resources for infrastructure and sustainable development, with special attention to cities and some of the challenges aggravated by the climate, energy and digital transitions. The next meeting will be held on September 19 and 20 in Rio de Janeiro.
