WASHINGTON, DC, April 17, 2024 - A more productive, inclusive, and greener economy is at the core of the new strategic partnership between the World Bank Group (WBG) and Brazil. Endorsed last week by the WBG Board of Directors and released today, the plan for the 2024-2028 period will guide the Group's joint work to promote inclusive and sustainable development while tackling climate change in the country.
Developed in close coordination with the Brazilian government and many stakeholders, this strategic plan supports Brazil's development priorities as laid out in its Pluriannual Plan (PPA) for 2024-2027 and the Ecological Transformation Plan (ETP). It also considers the ambitions of the Brazilian private sector to improve the country's business environment and help companies excel on the global stage.
"The overarching goal of this strategy is to help Brazil build a more productive, more inclusive, and greener economy, including in the Amazon and other key biomes, while also supporting institutional governance and the reduction of racial and gender disparities in a systematic way," said Johannes Zutt, World Bank director for Brazil. "Our activities will focus on promoting greater productivity and employment, inclusion of the poor and underserved populations, and a greener economy with reduced vulnerability to climate shocks."
The strategy seeks to enhance productivity in Brazil, by addressing longstanding impediments towards developing a more competitive economy. This involves working to reduce the cost of doing business, expand access to finance, boost human capital, promote innovation and modern infrastructure (especially digital, transportation and logistics), as well as helping to attract private investment on all these fronts.
"Mobilizing private capital is at the center of our strategic plan in Brazil," said Manuel Reyes-Retana, IFC Regional Director for Brazil, Ecuador, Peru, Bolivia, and the Southern Cone. "To ensure a sustainable and inclusive development, the private sector should play a key role, focusing on a productivity-oriented growth model, while also promoting innovation and helping the country reduce its emissions. The WBG will support the expansion of sustainable finance and capital market development to channel investments in sectors that are essential to support the country in its climate adaptation and mitigation strategy."
To promote inclusion, the strategy will support policies to help the poorest realize more economic opportunities, through enhancing their access to high quality education, health care services, water and sanitation, and digital services, as well as supporting land tenure regulation in rural areas. The WBG will also support financial solutions for Women-Owned Small and Medium Enterprises (WMSE) with an additional focus on underserved businesses in the North and Northeast regions of Brazil.
Sustainability is a central goal in the new strategy, aiming to help Brazil realize its potential as a global climate leader. The strategy has an important focus on supporting policies and projects to expand Brazil's clean energy matrix and to help rural producers withstand the impacts of climate change while ensuring sustainability and food security. The strategy also seeks to help industries and cities to reduce carbon emissions, curb illegal deforestation, improve the management of natural resources, establish taxonomies, and mobilize climate finance, such as through green and blue bonds and sustainability-linked instruments.
To support Brazil in its efforts to stop deforestation, advance in bioeconomy initiatives, and promote sustainable development in the Amazon, strong and innovative partnerships are essential. The strategy enhances existing efforts, such as the Memorandum of Understanding with the IDB signed in August 2023 and discussions with BNDES to support the implementation of the Climate Fund. It also includes engaging with new partners, such as the Amazon Treaty Cooperation Agency (ATCO), and various Brazilian banks and agencies, such as EMBRAPA. In that context, IFC and IDB Invest launched the Amazon Finance Network during COP28, together with 24 founding signatories, to mobilize capital, share knowledge on innovative financing solutions, and generate synergies with the public sector to create employment opportunities through Micro, Small, and Medium Enterprises in the Amazon.
The new strategy was prepared jointly by the World Bank Group institutions operating in the country: the International Bank of Reconstruction and Development (IBRD), the International Finance Corporation (IFC) and the Multilateral investment Guarantee Agency (MIGA).
It has the support of the government of Brazil, represented by the Ministries of Finance and Planning & Budget, and was developed in consultation with representatives from states and municipalities, the private sector, academia, civil society, Indigenous Peoples, and afro-Brazilians groups, and with other development partners.
During this new strategic period, lending from IBRD is expected to average about US$ 2 billion per year, and financing from IFC is likely to exceed US$ 5 billion a year, including own resources and mobilization. Guarantees from MIGA are also expected to grow.
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