GOVERNMENT PUBLISHES DECREE ENCOURAGING PROJECTS WITH ENVIRONMENTAL AND SOCIAL BENEFITS
On 5 June 2020, in a ceremony for World Environment Day, the Federal Government published Decree No. 10,387, which includes among the priority investment projects in the area of infrastructure or research-intensive economic production, development and innovation, for the purposes of the encouraged debentures, among others, provided for in Law No. 12,431, of 24 June 2011, infrastructure projects that provide relevant environmental or social benefits.
The measure amends Decree No. 8,874, of 11 October 2016, which considered as priority only investment projects that are subject to a public-private concession, permission, lease, authorisation or partnership process and that are part of the Investment Partnership Program (PPI) and those approved by the responsible sector ministry or implemented by a concessionaire, permissionaire, authorisation holder, lessee or Special Purpose Entity (SPE) established for this purpose.
Per Decree nº 10,387, investment projects in the area of infrastructure or intensive economic production in research, development and innovation, which provide relevant environmental or social benefits in the sectors of:
- urban mobility (non-motorised public transport and low-carbon public transport);
- energy (projects based on renewable technologies for solar, wind, waste and small hydroelectric power plants);
- basic sanitation (water supply systems, sanitary sewage, rainwater management and urban drainage and solid urban waste management); and
- social projects carried out in subnormal agglomerates or isolated urban areas, as defined by the Brazilian Institute of Geography and Statistics (IBGE).
According to the Ministry of Mines and Energy (MME), Decree nº 10,387 creates new mechanisms for issuing green debentures, establishing more favorable conditions for obtaining financing in order to boost the implementation of new renewable sources, such as the construction of power plants photovoltaic and wind power plants.
According to MME, in the next ten years, more than 25,000 MW in new wind power plants and more than 8,000 MW in new photovoltaic plants can be implemented in Brazil, which in addition to attracting investments and contributing to the generation of jobs, will promote development and the quality of life in the regions where the project is located. The expectation is that Decree No. 10,387 finally unlocks the green bond market in Brazil.
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