The International Finance Corporation (IFC), a member of the World Bank Group, is investing in BV bank to support the financing of small-scale distributed generation (DG) solar panels in Brazil, to increase access to solar energy for retail consumers, contributing to the diversification of the country's energy matrix.
Despite being the fastest-growing energy source, solar energy represents less than 10% of total energy consumption in Brazil. In 2023, more than 70% of solar energy capacity additions were from distributed generation. However, access to financing is still limited, with 78% of customers experiencing difficulties in 2022. To overcome this financing gap, IFC has been investing to help alleviate the constraints faced by solar DG projects in the country by making solar energy more affordable.[1]
The investment in BV comprises a five-year loan of up to $ 150 million (equivalent to R$ 900 million), fully dedicated to the financing of small-scale residential solar systems in Brazil. In addition to the financing, IFC will also provide BV with knowledge and capacity building, utilizing its experience in the solar sector to support the growth of the financial institution's portfolio. This project is in accordance with IFC's commitment to aligning new investments with the Paris Agreement and its own strategy to promote the sustainability of the banking sector in Brazil.
"We are pleased to work with BV to scale up financing for solar solutions. This initiative supports Brazil's efforts towards sustainable economic growth and climate resilience, helping the country on its journey to becoming a global leader on climate issues," said Helena de la Torre, IFC's regional manager for Financial Institutions - Brazil and Southern Cone. "This investment is also important to drive the expansion of financing for solar DG projects in Brazil, encouraging other financial institutions to replicate the business model," added Helena.
The investment in BV bank is in line with IFC's broader goal of helping to expand access to climate finance for solar systems by making it accessible to a wider range of customers, including improving financing conditions so that facilities are more affordable for the population. This goal, in turn, is part of the World Bank Group's strategy for Brazil for the next five years, which aims to build a more productive, inclusive, and sustainable economy, by fostering productivity and competitiveness-led growth, promoting inclusive development, and unlocking Brazil's potential as a sustainable economy and a global leader on climate issues.
"This partnership with IFC is recognition that we are evolving with the ESG agenda and contributing to a low-carbon economy by financing energy transition projects. With this loan, there is more than R$ 3.5 billion in green funding in 2024, totaling R$ 4.62 billion in active green funding", says Rogério Monori, executive director of wholesale at BV bank.
IFC expects this project to contribute to environmental sustainability by driving the growth of financing for solar DG projects in Brazil, encouraging other financial institutions to replicate the business model.
About BV bank
BV bank is one of the largest financial institutions in Brazil in terms of credit portfolio and operates in the Retail and Corporate & Investment Banking segments. In its business strategy, it combines the solidity of traditional banks with the mindset of digital banks. BV is a credit specialist, leader in the financing of used light vehicles, residential solar panels, and vehicle-secured loans, in addition to being the first institution to neutralize the CO2 emissions of the cars it finances. Through the BVx ecosystem, the bank consolidates all innovation initiatives and digital partnerships. BV bank has defined its commitments to the environmental, social, and governance pillars in the public document, "Commitments for a lighter future 2030."
[1]Greener, 2023 Brazil Strategy Report Distributed Generation, February 2023
About IFC
IFC a member of the World Bank Group is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet. For more information, visit www.ifc.org.
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