BNDES fund will receive an investment of R$ 20 million from MBM

The organization helps the bank select socio-environmental impact projects with a minimum value of R$ 5 million

The Bem Maior Movement (MBM), created at the beginning of the pandemic by major business leaders to strengthen the culture of giving, has committed to securing R$ 20 million in initial contributions for the new BNDES Socio-environmental Fund, a matching fund launched in August through which the bank matches R$ 1 for every R$ 1 invested by the private sector in socio-environmental impact projects, up to a limit of R$ 100 million. In other words, the total available resources will reach R$ 200 million.

The first registration period runs until the 30th of this month, but proposals will be continuously analyzed, whereas previously, it was necessary to wait for a public call for proposals. To be eligible, projects must have a minimum value of R$ 5 million and aim to reduce inequalities in education, generate income, or provide benefits to the environment.

The partnership between MBM and BNDES is unprecedented and should pave the way for other initiatives of this kind, according to Bruno Aranha, director of productive and socio-environmental credit at the bank.

The fund is part of one of BNDES's pillars for achieving goals linked to the United Nations Sustainable Development Goals (SDGs). "We want to expand the range of financial products for these actions, raise more third-party funds to finance projects; and develop the institutional side, with advances in policies, processes, and risk assessment capacity as a way to move forward on this agenda," says Aranha.

Non-refundable funds fall under the category of new products, which in practice are donations. They do not require repayment of the loan, provided they strictly comply with legal requirements and demonstrate the results of the proposed actions.

The Socio-environmental Fund functions as an expansion of the former Social Fund, created in 1997, which has already supported 420 projects with R$ 1.7 billion, according to Aranha. It also operates on a model similar to Salvando Vidas (Saving Lives), a matchfunding initiative created in April 2020 to leverage resources for actions related to health and combating the effects of the pandemic. Salvando Vidas mobilized R$ 113 million from 67 companies and 1,640 individuals. The money was used to help 871 hospitals with equipment, oxygen plants, ventilators, and refrigerators for vaccines, among other things.

According to the director, the expertise of the Bem Maior Movement in the areas of education and entrepreneurship will be fundamental in contributing to the evaluation of the proposals submitted and in validating the most interesting and far-reaching projects.

Carola Matarazzo, executive director of MBM, believes that the ESG (environmental, social, and governance) agenda of companies will stimulate the appetite even of those that do not yet have a developed philanthropy area. "A year ago, we started designing, together with the bank, a model that respected all the bank's governance and compliance regulations and requirements, and that would also be interesting for companies," says Matarazzo.

For six months, the teams discussed the necessary standards, which, according to Matarazzo, resulted in a robust program that met all the requirements of the public bank.

“We will help them find partners, and we are at the project validation table. The great legacy of this work is opening a path for this line of non-reimbursable loans in the bank's budget,” says Matarazzo. “The care in governance is redoubled, but it will be a resource available in the budget and at an absolutely necessary time like this.”

“This partnership is another step in BNDES's engagement with the corporate sector and serves as a model for future actions aimed at leveraging the impact and scope of socio-environmental initiatives for society, with lasting and effective results,” says Petrônio Cançado, BNDES's director of infrastructure credit.

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This article was originally published in the newspaper Valor Econômico.

Image Credit: Press Release/MBM