MIGA Supports First Conservation Agriculture Project in Brazil

BdB is a leading bank present in almost all Brazilian municipalities, driving agribusiness development in the country. BdB will use the MIGA-covered loan to support micro, small, and medium farmers that use conservation agriculture methods, in the form of revolving working capital loans of up to $2 million covering expenses on production cycles of their farming operations. Conservation agriculture includes practices such as no-till farming, in which seeds are directly deposited into untilled soil that has retained the previous crop residues as mulch.  

The MIGA-guaranteed loan will finance the cultivation of approximately 978,000 hectares of land and help avoid up to 11.87 million tons of GHG emissions over the 10-year guarantee period. The MIGA-guaranteed loan will provide small farmers with much-needed financing to accelerate the adoption of conservation agriculture and support Brazil’s transition to a low-carbon economy. This is the first MIGA-covered loan that is compliant with the Green Loan principles, MIGA’s first transaction in Brazil since 2014, and its first conservation agriculture project.    

“MIGA is excited to support this climate-smart project in Brazil, with a specific focus on small and medium farmers,” said Hiroshi Matano, MIGA Executive Vice President. “Our first long-term engagement with BdB, one of the largest banks in Latin America and a leader in agribusiness lending, holds great promise in the climate finance space.”   

BdB will provide timely and flexible funding of up to $2 million to small and mid-size farmers with annual revenues below $532,000 to ensure that they have access to the necessary funding for their annual harvesting requirements. The unique aspect of this program lies in its revolving nature. Once the loans are repaid, the farmers become eligible to apply for new loans in subsequent years, allowing them to sustain their farming operations and meet their evolving financial needs throughout the entire 10-year guarantee period. This ensures that climate mitigation benefits are sustained over the long run. BdB and MIGA will work together to evaluate the potential for carbon credits and benefit sharing with local stakeholders, further scaling the climate mitigation and development impact. 

“We are delighted to execute the largest transaction to date in Latin America under the MIGA Non-Honoring of Financial Obligations guarantee product, and the first MIGA-supported transaction for a commercial bank globally,” said John Meakin, Global Head of Export and Agency Finance at J.P. Morgan Payments. “This MIGA financing is key to support Banco do Brasil’s sustainability plan promoting good agricultural practices and low carbon agriculture and showcases our commitment to Brazil and its worldwide leading MSME agricultural sector.” 

“Banco do Brasil is an international benchmark in sustainability and holds the leadership of agribusiness in Brazil. With unprecedented and innovative solutions such as this operation, we are showing the world that agribusiness and sustainability can and should go together. Supporting our clients in the transition to a low-carbon economy with socioeconomic development is our commitment and we want it to inspire more and more institutions and investors in Brazil and around the world,” said Tarciana Medeiros, CEO of Banco do Brasil.  

The project also incorporates a Gender Action Plan which includes actions to address intersectional challenges to women’s economic inclusion. Specifically, the plan includes a pilot program targeting women farmers in Quilombo (Afro-descendant) communities to foster their financial inclusion.  

Brazil’s GHG emissions are dominated by agriculture (38 percent), followed by energy (26 percent), and land use and forestry (24 percent). The country set a target of a 53.1 percent reduction in GHG emissions by 2030 and carbon neutrality by 2050.  

About JPMorganChase  

JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorganChase had $4.1 trillion in assets and $341 billion in stockholders’ equity as of June 30, 2024. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com 

About Standard Chartered Bank 

Standard Chartered Bank is a leading international cross-border bank connecting the world's most dynamic markets and owned by the British multinational finance corporation Standard Chartered PLC with $825.8 billion in consolidated assets (as of September 30, 2023). The Group has more than 85,000 employees and operations in consumer, corporate and institutional banking, and treasury services. The bank is rated A1 and A+ by Moody’s and S&P, respectively. 

About HSBC Bank plc  

HSBC Bank is a multinational universal bank and financial services provider part of the British multinational holding company HSBC Holdings plc with US$3.0 trillion in consolidated assets (as of September 30, 2023). The Group is one of the world’s largest banking and financial services organizations with about 219,000 employees and offices in 62 countries serving around 39 million customers worldwide. HSBC Bank is rated AA-, A1 and A+ by Fitch, Moody’s, and S&P,  

respectively. 

About Crédit Agricole CIB  

Crédit Agricole CIB is the corporate and investment arm of the French bank Crédit Agricole Group with US$2.6 trillion in consolidated assets (as of September 30, 2023). The bank offers a broad range of products and services in the businesses of capital markets, investment banking, structured financing, commercial banking, and international trade. Crédit Agricole Group operates in 46 countries and has more than 145,000 employees serving 53 million customers worldwide. The Group is the largest asset manager in Europe and the tenth largest bank in the world by total assets. The bank is rated A+, Aa3 and A+ by Fitch, Moody’s, and S&P, respectively, 

About Banco do Brasil 

With over 120,000 employees worldwide and over 5,000 service points in Brazil, Banco do Brasil cares about sustainability, with public commitments for a more sustainable future, with bold goals by 2030 and aligned with the Sustainable Development Goals and the Paris Agreement. In June 2024, Banco do Brasil's Sustainable Credit Portfolio reached R$358.4 billion, an increase of 11% in 12 months. Of this amount, R$150 billion was allocated to social businesses. BB's financing portfolio for renewable energy exceeded R$15.4 billion in June 2024 (compared to R$13.2 billion in March 2023), an increase of 16.6% in 12 months. The bank has a balance of R$1.4 billion in its bioeconomy portfolio in the Amazon region, considering only Amazonian products. At the end of the first half of the year, more than 670,000 hectares were preserved in carbon projects, using the avoided deforestation methodology (REDD+). 

About World Bank Group Guarantees  

Initiated in 2024, World Bank Group Guarantees consolidates all guarantee products and experts from across the World Bank Group institutions at MIGA. It provides a simplified and comprehensive menu of guarantee solutions, enabling clients to select the instrument that best suits their needs. The platform streamlines processes, removes redundancies, and provides greater accessibility by de-risking investments in developing countries. Its goal is to boost the WBG’s annual guarantee issuance to $20 billion by 2030.   

For more information about the guarantee platform, please visit: https://www.worldbank.org/wbgguarantees  

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Contact:  

In Washington:  Elizabeth Howton, (202) 458-5922 or ehowton@worldbankgroup.org