The Guarantee Fund for Biogas Projects is the first guarantee mechanism that will provide financial guarantees on credit lines for biogas projects in Brazil, leveraging lending by private and public banks. Biogas is a renewable energy source that can produce electricity, heat, or fuel in off-grid areas that currently rely on high-polluting fossil fuels.
The biogas industry is not new but has not taken off in Brazil partially because of a high-risk perception from funders. To secure credit, biogas projects must comply with a high level of guarantees, preventing access to affordable credit lines, even for projects with strong economics.
A guarantee fund for private and public banks–specifically for biogas projects–would reduce the risk for financial institutions, therefore increasing access to credit.
“Brazil has the highest potential in the world for biogas. However, due to a lack of knowledge about the financial aspects of biogas projects, the perception of risk by banks and financial institutions is too high. The Lab’s expertise will help us design and launch an attractive, workable financial product,” – Alessandro Gardemann, President, ABiogas
The proponent estimates that a USD 20 million fund will leverage five times the amount in investments in biogas projects, adding an additional 60 MW of renewable electricity or more than 130 million m³/year of biomethane, which can replace more than 130 million liters per year of fossil fuels in thermal power plants or as vehicular fuels. This will replace planned or projected thermal plants fueled by natural gas and provide a better destination for agricultural and sanitation waste.
News & Events
The Lab selects six new ideas that create climate investment opportunities for a sustainable economic recovery in emerging economiesMarch 2, 2021
Selected ideas will tackle investment barriers in key sectors across Africa, Asia and Latin America Since 2014, the Lab has incubated 49 ideas that have mobilized USD 2.4 billion to date LONDON – The Global Innovation Lab for Climate Finance (the Lab) has selected six new climate finance ideas for its 2021 acceleration program. In the […]