The Eco Invest Brasil Program recognizes a simple reality: public capital alone is insufficient to finance Brazil’s resilient development. What is required is an environment that allows private investors to participate on reasonable terms – reducing risk, aligning incentives, and creating scale.

Eco Invest combines blended finance, currency hedging mechanisms, and competitive auctions to attract long-term private investment for sustainable agriculture, land restoration, and resilient infrastructure. Banks and other financial institutions compete for access to public funds, with bids evaluated primarily on their ability to mobilize the largest volume of private capital.

Banco Santander Brasil, one of the largest financial institutions in the country,  participated in the first two Eco Invest auctions. While the bank has broad access to funding, the challenge lies in mobilizing long-term foreign capital at scale for Eco Invest’s priority sectors.

To address this challenge, IDB Invest provided a loan to Banco Santander Brasil, with a tenor of up to five years and a maximum amount of $150 million, while mobilizing an additional $400 million from international B-lenders with shorter tenors. By acting as Lender of Record, IDB Invest extends its preferred-creditor status and contractual framework to private investors – thereby significantly enhancing risk mitigation and investor confidence.

How Eco Invest Auctions Channel Capital Through Banks to Projects  

Eco Invest’s blended finance auctions operationalize a simple mechanism: public catalytic capital is allocated competitively to local financial institutions, which then mobilize private capital (including external funding) and on-lend to eligible projects, subject to defined eligibility, safeguards, monitoring, and reporting requirements.

Mobilizing Additional Private Capital, Not Replacing It

Santander’s funding profile is robust, supported by a large deposit base and diversified market access. As such, the value of this transaction lies not in providing access to capital but in mobilizing additional private investment and extending tenors.

The A/B Loan Enables Santander  

• Secure longer-term funding aligned with the cash-flow profile of resilient assets
• Mobilize private international capital at scale under Eco Invest requirements
• Strengthen its participation in Eco Invest auctions, where mobilization ratios are a key success metric

In practice, the transaction demonstrates how multilateral capital can be used not to crowd out private funding, but to catalyze it – bridging the gap between investor appetite and project needs.

Aligning Finance with Impact

The proceeds of the A/B loan will support financing for projects eligible under Eco Invest, including:

• Sustainable agriculture and livestock
• Restoration and productive use of degraded land

• Resilient infrastructure aligned with national development priorities

   

At a higher level, the transaction contributes to:

• Mobilizing private capital for aligned investments
• Supporting Brazil’s land restoration goals across multiple biomes
• Demonstrating a replicable model for scaling sustainable finance in emerging markets

A Model for Emerging Markets

As highlighted by the OECD, Eco Invest offers a replicable model for emerging economies seeking to mobilize foreign capital while managing currency risk. The Santander A/B loan shows how this framework can be operationalized through well-designed financial intermediation that combines public and private resources in a disciplined, market-oriented way.

For IDB Invest, this transaction reflects our Originate-to-Share approach: originating complex, high-impact transactions, structuring them to meet market requirements, and then bringing in private investors to scale impact.

In doing so, we help turn investment priorities into bankable projects – and demonstrate that with the right structures, private capital can play a decisive role in financing resilient growth.