Itau Raises $408 Million for Renewable Energy Projects

Tuesday, January 27, 2015

(Updates with Itau BBA comment in third paragraph)

(Bloomberg) — The Brazilian bank Itau Unibanco Holding SA raised 1.05 billion reais ($408 million) to finance renewable- energy and water-treatment projects.

That’s the most ever raised for renewable energy in Latin America by a Brazilian bank, the Sao Paulo-based lender said in an e-mailed statement Tuesday. The funding includes a five-year, 262 million-real loan from International Finance Corp. and a three-year, 787 million-real loan from Bank of America Corp., Mizuho Bank Ltd. and Commerzbank AG.

“There is a big demand for financing renewable energy projects in Brazil,” Carolina Amaral Camargo, head of international financial institutions at the bank’s Itau BBA unit, said in a telephone interview. “We already have a big pipeline of operations being analyzed by the bank and we are going to diversify the financing line for many companies.”

Banks in Brazil may increase their financing for clean power as President Dilma Rousseff pursues policies to reduce debt and control inflation and the national development bank BNDES pulls back, according to Marcelo Girao, head of energy for project finance at Itau BBA.

“BNDES is slowing down in some types of loans, so the development bank has to find alternatives with other banks,” Girao said in an interview in Sao Paulo this month. “Commercial banks will have more exposure to renewable projects, such as wind parks.”

Bank of America, for example, has set a goal of $50 billion for green initiatives in the next 10 years, according to the statement.

Brazil’s monetary council, which includes the finance minister and central bank president, raised the benchmark interest rate for loans provided by BNDES to 5.5 percent starting Jan. 1, from 5 percent.

Girao estimated that as much as 30 percent of long-term loans approved in the next few years by the development bank, Banco Nacional de Desenvolvimento Economico & Social, will come through private banks, a strategy aimed at “risk diversification.”

To contact the reporter on this story: Vanessa Dezem in Sao Paulo at To contact the editors responsible for this story: Reed Landberg at Jim Efstathiou Jr., Carlos Caminada