IDB, Banco do Brasil, CAIXA and BNDES Plan to Develop Amazonia for All ETF

RIO DE JANEIRO - The Inter-American Development Bank (IDB), the National Bank for Economic and Social Development of Brazil (BNDES), the Bank of Brazil (BB) and the CAIXA Econômica Federal (CAIXA) plan to develop a new exchange-traded fund (ETF) to be listed on Brazil's B3 stock exchange as a way to finance sustainable investments in the Amazon.

The Amazonia for All ETF aims to democratize access to sustainable investments, combining the use of financial resources with performance-based incentives and cultivating a more diverse and broader investor base in domestic and international markets.

At this stage, the aim is to lay the groundwork for creating and distributing shares of the ETF on the capital market before the COP30 to be hosted in the Brazilian city of Belém, in the state of Pará, in 2025.

To conduct the studies for the Amazonia for All ETF, today a letter of intent was signed by IDB President Ilan Goldfajn; BB vice-president of Business Government, and Corporate Sustainability, José Ricardo Sasseron, acting on behalf of President Tarciana Medeiros; the vice-president of Sustainability and Digital Citizenship at CAIXA, Paulo Rodrigo Lopes, acting on behalf of the president Carlos Vieira; and the Director of People, Management, and Operations for BNDES, Helena Tenorio, acting on behalf of the bank's president, Aloizio Mercadante.

The resources from the portfolio of fixed income assets of BNDES, BB and CAIXA of this new fund are set to be allocated to sustainable loans in Brazil's Amazon region. This fund will track a new benchmark index that has yet to be created.

An ETF was chosen as the vehicle for raising funds because it offers equal access to small and large investors alike and is highly liquid, since the shares are listed on stock exchanges. The aim is for any individual or entity to buy and sell shares of the ETF at an approximate value of R$ 100.00.

Another positive feature of ETFs is that the index provider typically discloses the portfolio composition daily. This allows investors to know exactly what they are investing in.

In addition, widespread use of ETFs in the international market makes it easier to promote and trade this instrument through global investment platforms.

"A year ago, the IDB launched its holistic Amazonia Forever program. Now, alongside our partners, we announce our plan for the Amazonia for All ETF, which will democratize investments for the Amazon and support a sustainable future for the region. Through this new instrument, we take yet another step to ensure that the Amazon will be with us forever," says IDB President Ilan Goldfajn.

"This act of joining forces to drive sustainable development in the Amazon using an innovative instrument on the Brazilian capital market underscores BNDES' commitment to the COP 30 agenda. Under the Lula administration, BNDES is adeptly and transparently realizing its historic role as a key driver of innovation and sustainability in the Brazilian economy," says BNDES President Aloizio Mercadante.

Bank of Brazil President Tarciana Medeiros emphasizes the importance of acting in conjunction with various social stakeholders. "This is yet another example of our practical and consistent performance on ESG, along with many other initiatives like joining the Green Coalition and partnering with development banks to promote inclusive productive activities. The return on this investment goes beyond the financial; today we are building a more promising, fair and environmentally responsible future," she says. "This ETF is therefore an invitation for our investor clients to join us in our pursuit of a more sustainable economy," adds Medeiros.

For CAIXA's president, Carlos Vieira "this initiative shows how cooperation can bring permanent benefits for society, especially when it comes to sustainable investments. From our bank's floating branches to financial instruments such as this ETF, CAIXA is stepping up its actions to truly impact the development of the Amazon region and its people," Vieira said.

"We believe that through investment and innovation-like selecting model bioeconomy or socio-biodiversity projects in all biomes or projects with innovative and sustainable housing solutions for the Amazon-CAIXA can help Brazil find practical solutions to challenges like climate change, the energy transition, and sustainable agribusiness," he adds.

BNDES, BB, and CAIXA will partner to conduct studies for this ETF, with technical and financial support from the IDB. This partnership also aligns with the objectives of the Green Coalition, an international alliance of public development banks launched last year to promote joint initiatives for the sustainable development of the Amazon region.

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