Brazil and China are negotiating a bilateral green investment fund

The sources indicated that the fund was proposed by the Brazilian government and that the idea should be included in a bilateral declaration on the environment

The Brazilian government places the issue of the environment at the top of its international agenda | Credit: Reuters/Bruno Kelly

Brasilia – The governments of Brazil and China are negotiating the establishment of a bilateral green investment fund to finance and support the development of green industries and renewable energy in both countries, and its launch may be announced during President Luiz Inacio Lula da Silva’s trip to China next week.

“I don’t know if it’s possible to announce that because these things are complicated, but the idea is to have a bilateral fund,” Ambassador Celso Amorim, special adviser to the presidency, told Reuters. “It’s a two-sided (Chinese and Brazilian) fund for investments in this field.”

Sources accompanying the negotiations explain that the fund was proposed by the Brazilian government and that the idea should be included in a bilateral declaration on the environment, although the mechanism itself may not be announced yet.

The intent is for the bilateral fund to include, according to one of the sources, the contribution of public and private resources that will be used to increase investments in new green technologies and support clean industries and renewable energy in both countries and also in other countries in development.

According to one of the sources, despite the fact that the proposal is Brazilian, the negotiations have progressed because there is receptivity on the Chinese side, which is also interested in issues related to climate change.

There are several agreements. “I know there is an agreement on renewable energy, and there will certainly be an important announcement on other aspects of climate,” said Celso Amorim.

The declaration can be the basis for a broader agreement, work in international forums, bilateral cooperation agreements in areas related to the subject matter as well as the national bilateral fund.

The Brazilian government is putting the environmental issue high on the international agenda, including raising funds to combat deforestation. In the case of China, also a developing country, there is no expectation of donations for mechanisms such as the Amazon Fund – not least because the country does not usually operate with non-refundable donations, and also has its own climate problems to solve.

However, the fund can help attract private investment from international companies willing to invest in this sector.

Since the beginning of the year, the Brazilian government has already received 3.3 billion donations, with unfrozen resources from Norway and Germany, which were suspended during the Jair Bolsonaro government.

France, Germany, the United Kingdom and the European Union have also indicated that they can contribute. The United States, during Lula’s visit to the United States, indicated an immediate contribution of 50 million, but later withdrew to try to obtain a larger amount, but it required congressional approval.