Executive summary

Brazil is strategically positioned in the fight against climate change. Due to its renewable and diverse energy matrix, the country can lead globally on nature-based solutions and low-carbon technologies.

The Brazilian climate transition will require massive investments, estimated at between R$ 1 trillion and R$ 1.2 trillion by 2030, to achieve its announced commitments. This total comprises about R$ 800 billion for energy transition and R$ 400 billion for nature-based solutions.

The market’s willingness to finance climate transition solutions is still limited, especially in emerging sectors or those with greater technical complexity. This reluctance reflects a risk-return equation that is still unbalanced for most climate solutions, as a result of the low maturity of four fundamental pillars: regulatory standardization, technology, value chain, and institutional incentives.

The study analyzed 15 key solutions for decarbonization, categorized into four maturity archetypes, depending on the stage of development of the four fundamental pillars. Each archetype presents specific challenges for capital mobilization, regulatory alignment, and consolidation of value chains, requiring specific financial approaches:

• Undefined technological pathways: Focus on research and development grants; insurance and guarantees to mitigate the risk of first projects; offtake contracts and incumbent engagement to signal demand.
• Emerging solutions: Catalytic equity and concessional debt for capital-intensive risk absorption and demand mandates to reduce revenue uncertainty.
• Nascent chains: Concessional debt, strategic equity, and long-term offtake contracts, which promote the integration of the value chain to reduce costs and increase scale.
• Developing markets: Guarantees, concessional debt, and offtake contracts to mitigate demand risk and scale ecological restoration and conservation in a predominantly voluntary carbon market.

The challenge of financing the climate transition is complex and goes beyond the financial dimension, requiring a combination of technical, institutional, and market actions adapted to the reality of each solution. There is no shortage of projects—the Brazil Climate and Ecological Transformation Investment Platform (BIP) alone has already identified 15 projects seeking USD 22 billion. However, there is no single solution that fits all contexts and solutions.

Public and development institution support will be essential to unlock climate finance in Brazil. Several initiatives are already advancing in this direction, such as:

• Brazil Climate and Ecological Transformation Investment Platform (BIP), which connects projects to private investors and concessional capital, in addition to developing innovative mechanisms to overcome critical barriers;
• Eco Invest Brasil, which expands the supply of concessional capital in key sectors;
• BNDES, with the potential to act as an orchestrator between development actions and the private sector, allocating strategic resources to make projects viable; and
• Multilateral development banks (MDBs), climate funds, and sectoral initiatives can strengthen support and expand available sources of financing.

Directing concessional capital to climate solutions with higher risk profiles is essential—not only to make the first projects viable, but also to mature emerging value chains, structure new markets, and mitigate structural flaws that today drive away private capital. This initial investment reduces uncertainties, generates practical references, and gradually allows solutions to achieve economic scalability, becoming attractive to commercial capital—as Brazil has experienced in the renewable energy sector in recent decades.

Coordinated action between the private (productive and financial), public, and tertiary sectors will be essential to solve regulatory challenges, structure sectoral plans with an integrated view of value chains, and implement efficient instruments to promote the market. This joint approach aligns economic incentives, reduces institutional barriers, and consolidates low-carbon markets in an integrated way, while driving decarbonization, socio-environmental resilience, and economic development. An action structured in this sense creates positive expectations, fostering a virtuous circle of investments.

The Brazilian presidency at COP30 represents a strategic opportunity to position Brazil as a global reference in climate solutions, attract additional capital to accelerate the transition to a low-carbon economy, and consolidate the country as an innovation hub and leader in mitigation, adaptation, and sustainable socioeconomic development.

Bain Insights are written by people and reflect Bain’s human insights and expertise. Of course, as a leading AI consultant to businesses, we use AI extensively to make our work more efficient. While this article was written by Bain partners, it was translated from the original Portuguese with the help of AI and then copyedited by humans.