The world sponsors it. Brazil tends to it. We all win.

Brazilian Development Bank

MANAGEMENT

Key instrument for industrial policy and infrastructure financing in Brazil

100% state-owned

under private law

operationally independent

Instruments:

Direct operations

Indirect operations

Project finance

Equity investments

Non-refundable credit lines

Guarantee Fund for MSME

Non performing loans 2009: 0,20 (%)

DEVELOPMENT BANKS

US$ Billion

ASSETS EQUITY DISBURSEMENT

WORLD BANK 275.4 40.0 18.6

BNDES 222.0 15.9 72.2

IDB 72.5 19.4 7.1

CAF 14.3 4.6 5.8Source: BNDES (Dec/09), World Bankl (Jun/09), IADB y CAF (Dec/08).

(*) World Bank as of June 30th.

SCALE AND SCOPEMATTERS

Drafting of environmental policies

and provision of technical support during

all phases of project analysis

Development and execution of financial

instruments and strategies to encourage

sustainable environmental initiatives

Verification of adherence to environmental

legislation and analysis of the legal aspects of

operations

Management of

the Amazon Fund

DEPUTYMANAGEMENT

Advisors Advisors

Department ofEnvironmental

Policies and StudiesDEMAM

Green Financing Department

DEOPE

Amazon FundDepartment

DEFAM

Legal Department

JUAMA

STRUCTURE OF THEENVIRONMENTAL DIVISION

total world’s forest area4 billion hectares,

nearly 30 % of the

earth’s landmass.

Approximately 56 % of these

forests are located in tropicaland subtropical areas;

seven countries possess about

60% of it,25 countries around 82%

170 countries share 18%.

The highest amounts of deforestation: in South America:

4.3 million hectares per year, followed by Africa with 4 million hectares per year.

FORESTS –FACTS ANDFIGURES

20 % of current global CO2 emissions,more than the total emitted by the

global transport sectorwith its intensive use of fossil fuels.

More than

one billion people rely heavily on forests for their

livelihoods.

More than two billion people,1/3 of the world’s population, use biomass

fuels, mainly firewood, to cook and toheat their homes.

1.7 billion tonnesof CO2 are released annually due to land use change. The major portion is from

tropical deforestation.

FORESTS –FACTS ANDFIGURES

THE AMAZONFOREST

The largest tropical rainforest on the planet.

Some 7 million km2 stretched across nine countries in South America:

BoliviaEcuadorVenezuelaColombiaPeruSurinameGuianaFrench GuianaBrazil

THE AMAZONFOREST

AL AlbaniaAT AustriaBA Bosnia-HerzegovinaBE BelgiumCH SwitzerlandCZ Czech RepublicDE GermanyES SpainFR FranceIT ItalyNL NetherlandsPT PortugalSK SlovakiaUK United Kingdom

TOTAL AREA

14 countriesconsidered

2,456,565

European Union 4,422,773

Amazon states 5,217,423

BRAZILIANAMAZON:TERRITORIALCOVERAGE

Some 60% of the

Amazon forest is in

Brazilian territory.

82% still

forested

BRAZILIANAMAZON

in about 30 years18% of

deforestation

BRAZILIANAMAZON

The Brazilian government’s original proposal presented in

Bali, Indonesia, in

Dec/2007, to create

a mechanism to support efforts in reducing deforestation in the Amazon.

THE AMAZON FUND CONTEXT AND HISTORY

Jan. Feb. Mar. Abr. May. June. July. Aug. Sept. Oct. Nov. Dec.Dec.

CREATION OF THE AMAZONFUND BY DECREE

Aug. Sept. Oct. Nov.

CREATION OF THEENVIRONMENTALDIVISION OF THE BNDES

2008 2009FIRST PROPOSALSSUBMISSION

FIRT FIVEAPPROVEDPROJECTS

COP 15

COFA meetings

2009’S MAIN ACTIVITIES:team structuringdevelopment of processes and proceduresdetailing of operations criterianegotiation of tax exemptions on donationscontract external auditsconstruction of a Logical Framework development of a websitetechnical visits to projects seminars, forums and workshops.

PROPOSALS REACH“ELIGIBLE” LEVELCOFA FIRST MEETINGS:

guidelines for theresources’ application

DONATIONAGREEMENTWITHNORWAY

AMAZON FUNDTIMELINE

promoting a consistent and continuous reduction in the rate of deforestation in Brazil;

transforming the reduction of emissions from deforestationinto a system that finances the conservation andsustainable use of forests;

demonstrating the feasibility of the incentive mechanisms to reduce emissions from deforestation;

and making the forest more valuable than the alternative use of the land.

AMAZON FUND GOALS

Funds raised are earmarked for non-reimbursable funding for projects aimed at:

PAS Sustainable Amazon Plan

PPCDAM Action Plan for Prevention and Control of Deforestation in the Legal Amazon

STATE PLANS State Plans to Combat Deforestation

COFA GUIDELINESAND CRITERIA

Guidelines and criteria established by theGuidance Committee of the Amazon Fund

THE BNDES’OPERATIONALPOLICIES

BNDES’ Operational Policies for the Amazon Fund

GUIDELINES AND CRITERIA / DETERMINING FACTORS Projects must be coherent with:

direct public administration agencies / indirect federal, state

and municipal agencies / research foundations / NGO’s / civil

society organizations of public interest / private companies /

cooperatives / governmental and university research centers

/ scientific & technological institutes / environmental land-

use planning and support entities (federal, state and

municipal) / research foundations / environmental control

entities

BENEFICIARIES

To achieve its objectives,

the Amazon Fund

supports projects

in the following areas,

specified in Decree nº.

6527/08:

management of public forestsand protected areas;

I

II

III

IV

V

VI

VII recovery of deforested areas.

conservation and the sustainableuse of biodiversity; and

ecological and economic zoning,land-use planning and land title regulation;

economic activities developedfrom sustainable use of the forest;

sustainable forest management;

environmental control, monitoring and surveillance;

SUPPORTEDCATEGORIES

1. Modernization andinstitutional development of agencies working in theAmazon Region;

2. Promotion of sustainableproduction activities;

3. Scientific and technologicaldevelopment;

4. Conservation and protectionof protected areas.

The BNDES, to maximize

operational efficiency

classified the seven Decree

areas into the four main

categories:

OPERATIONAL MODALITIES

GOAL• To support environmental management, land

tenure regularization, licensing, inspection and monitoring.

WHAT CAN BE FINANCED

• Ecological-Economic Zoning;• Monitoring systems;• Capacity building;• Property management systems;• Infrastructure equipment;• Information and communication systems.

POSSIBLE BENEFICIARIES

• Environmental, property and support organs (federal, state and municipal);

• Environmental law control entities.• NGOs

INSTITUTIONAL MODERNIZATIONAND DEVELOPMENT

GOAL • To support processes for sustainable production, commercialization and use of natural resources.

WHAT CAN BE FINANCED

• Timber & non-timber products’ chain;• Integration of forestry, agriculture and cattle-raising;• Forest Certification;• Renewable energies;• Ecotourism;• Other sustainable production activities.

POSSIBLE BENEFICIARIES

• Co-operatives;• Settlements;• Micro, small, and medium-sized companies; • Small rural producers;• Indigenous communities;• Anchor companies, and NGOs.

SUSTAINABLEPRODUCTIONACTIVITIES

GOAL• To support innovation and scientific and technological

research associated to sustainable production practices.

WHAT CAN BE FINANCED

• Infrastructure - ST&I programs and projects;• Development of monitoring systems and

methodology;• Information systems.

POSSIBLE BENEFICIARIES

• Governmental and university research centers;• Public companies;• Scientific-technological institutes;• NGOs.

SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT

GOAL • To support protected forest areas.

WHAT CAN BE FINANCED

• Creations and implementation of new Conservation Units;

• Consolidation of existing ones;• Monitoring of its biodiversity;• Preservation of its genetic resources;• Payment for environmental services.

POSSIBLE BENEFICIARIES

• Federal, state and municipal programs and projects;

• Public-private programs and projects;• NGOs.

PROTECTED AREAS

FUNDRAISINGFLOW CHART

The Forestry Service prepares a report defining reduction of emissions from data produced by Inpe. The report is assessed by the Technical Committee.

The Forestry Service sends the report to the BNDES and assigns the

amount to be reduced and the amount per ton of CO2.

The BNDES starts raising funds in accordance with the defined windows.

1

2

3

Fundraising

• Based on reduced emission from deforestation

• New resources are only raised when emissions in the Amazon have in fact been reduced.

• Emissions avoided are based on the deforestation reduction compared to the 10-year average deforestation rate, revised every five years

• If deforestation rate is higher than the average rate, the Fund will not be able to raise funds in that year

• Emissions are calculated as of the deforestation rate per hectare in the year.

Monitoring system for the Brazilian Amazon: INPE (since 1988)

Prodes Methodology (Deforestation Monitoring Project in the Legal Amazon)

Equivalence of Carbon per Hectare of Forest

• The Amazon Fund uses the value of 100 tC/ha (tons of carbon per hectare) of biomass corresponding to 367 tCO2e/ha (tons of carbon dioxide per hectare);

• An extremely conservative value when compared with literature data (from 130 to 320 tC/ha), but adequate to the simplicity intended for the computation method and helpful to its understanding.

T

DR

1996 2005 2006 2011 2016

REPRESENTATION OF THE CALCULATION MODEL TO CALCULATE THE REDUCTION OF EMISSIONS

26

Fundraising

Deforestation in the Amazon

Almost

75% Decrease in 05 years

Deforestation in the Amazon

Fundraising Kickoff

The Norwegian Government announced that it will provide the Amazon Fund with US$ 1 billion over the next four to seven years.

2009: US$ 110MM2010: US$ 110MM2011: at least US$ 110MM

First donation: Norway

RECOGNITION

Donors contribute to the Amazon Fund

and receive a non-transferable

diploma, declaring the corresponding

amount of emissions that were

prevented.

*donations do not generate any credit

• Manager (BNDES)

• Technical Committee (CTFA)

• Steering Committee (COFA)

Governance

• Composed of six notables in S&T, appointed by the Ministry of the Environment, based on a list submitted by the Brazilian Climate Change Forum

• The committee validates:Annual deforestation rate (measured by the National Institute for Space Research - INPE)Average historical deforestation rateEstimates of the forest carbon stock (determined by the Brazilian Forest Service)

• CTFA´s report shall determine the quantity of reduced emissions and authorize BNDES to raise the corresponding funds and issue diplomas

Technical Committee (CTFA)

• Responsible for the definition of strategic guidelines and criteria for the funds application

• The committee is constituted by representatives of governments and society

Nine agencies of the federal governmentNine states of the Brazilian Legal AmazonSix representatives of civil society

Guidance Committee (COFA)

• Ministry of the Environment• Ministry of Development, Industry and Foreign Trade• Ministry of Foreign Affairs• Ministry of Agriculture, Farming and Supply• Ministry of Agrarian Development• Ministry of Science and Technology• Presidential Staff Office• Strategic Affairs Secretariat of the President’s Office• Brazilian Development Bank - BNDES

Federal Members of COFA

One representative of each Legal Amazon state with an official plan for forest preservation and deforestation-fighting:

State Members of COFA

• Brazilian Forum of NGOs and Social Movements for the Environment and Development (FBOMS)

• Coordination of the Brazilian Amazon Indigenous Organizations (COIAB)

• National Industry Confederation (CNI)

• National Forum of Forest Activities (FNABF)

• National Confederation of Workers in Agriculture (CONTAG)

• Brazilian Society for Science Progress (SBPC)

Civil Society Members of COFA

• Priorities CriteriaGeographic

Projects carried out in the Environment Ministry’s assigned priority municipalitiesProjects in the areas of influence of PAC (Infrastructure Development Project)Projects carried out in municipalities / regions with higher conservation of forest cover

ThematicAdd value to the standing forestImprove regional development and land regularizationOrganize and integrate the systems of environmental control, monitoring, and enforcement

Criteria and Priorities

• Priorities Criteria

Diversity of Stakeholders Projects that involve cooperation among the public and private sectors, NGOs/social movements and local communities

Target PublicProjects with direct benefits to traditional communities, agrarian reform settlements and small-scale farmers

RelevanceProjects with high replication potential Projects with high impact (ex. R$/ hectare of protected forest or sustainably managed)

Criteria and Priorities

• Equity Criteria of Resource Application

Avoid concentration of project resources in specific States

Avoid concentration of resources among categories of

proponents

Avoid concentration of resources among specific

areas of concentration

Criteria and Priorities for 2009/2010

Guidelines and Investment Criteria

Guidance Committee of the Amazon Fund

Guidelines and Investment Criteria

Guidance Committee of the Amazon Fund

Project Implementation 

Local Government, NGOs

Project Implementation 

Local Government, NGOs

Approval and monitoring of projects  BNDES

Approval and monitoring of projects  BNDES

Calculation of deforestation ratesNational Institute of Space Research – INPE/MCT

Calculation of deforestation ratesNational Institute of Space Research – INPE/MCT

Calculation of prevented emissions 

Brazilian Forestry Service –SFB/MMA

Calculation of prevented emissions 

Brazilian Forestry Service –SFB/MMA

Certification of prevented emissionsTechnical Committee of the Amazon FundCertification of prevented emissionsTechnical Committee of the Amazon Fund

FundraisingBNDESFundraisingBNDES

Donors

Governments, Companies, NGOs, Individuals

Donors

Governments, Companies, NGOs, Individuals

Independent audit Independent AuditorsIndependent audit Independent Auditors

Governance

Contribution to monitoring & consolidating itsresults, through the analysis of the projectssupported and their impact indicators.

LOGICAL FRAMEWORK FOR THE AMAZON FUND

STRATEGICTARGET

REDUCTION OF DEFORESTATION WITH SUSTAINABLE DEVELOPMENT IN THE AMAZON REGION

PURPOSE

COMPONENT1Activities that maintain the standing forest are economically attractive in the Amazon Biome

COMPONENT 2 Government efforts assure the adequacy of anthropicactivities to the environmental legislation

COMPONENT3Area of the Amazon Biome has undergone land-use planning

COMPONENT 4Science, technologyand innovation activities contribute to the recovery, conservation and sustainable use of the Amazon Biome

OPERATIONAL FLOW OF PROJECTS

6. UNDERPERSPECTIVE Reception of a Previous Consultation.

5. CONSULTATIONLETTER

Reception of the documents listed in Previous Consultation.

4. ELIGIBLEThe project complies with the operational policies of the BNDES and the guidelines and criteria of the Amazon Fund.

3. UNDERANALYSIS

At this stage, the is the Amazon Fund team, begin a detailed review of the project.Matrix of Results/Logical Framework

2. APPROVED BNDES’ Board of Directors. Once approved, the applicant is requested to send the documentation required for contracting.

1. CONTRACTED

Contract signaturedisbursements - in installments, in accordance with the progress of the project.follow-up by the Fund’s operational team & by independent auditors. Disbursements are made

APPROVED PROJECTS - 2009

BENEFICIARY AMOUNTOF SUPPORT

AMAZON SUSTAINABLE FOUNDATION(FAS)

R$ 19.2 million(US$ 11 million)

AMAZON INSTITUTE OF PEOPLE AND THE ENVIRONMENT (IMAZON)

R$ 9.7 million(US$ 5.6 million)

INSTITUTE OF ENVIRONMENTALCONSERVATION – THE NATURECONSERVANCY DO BRASIL TNC BRASIL

R$ 16 million(US$ 9.2 million)

OURO VERDE INSTITUTE R$ 5.4 million(US$ 3.1 million)

BRAZILIAN BIODIVERSITYFUND (FUNBIO)

R$ 20 million(US$ 11.5 million)

Approved Projects in 2009

Total of BRL 70,3 million = USD 40,4 million

Projects deal with:

protected areas, enviromental’s servicespayments to communities, enviromental rural producers registrations, monitoring, stimulation to sustainable activities, recover of degraded areas, familar rural production

Time to implementation varies 3-5 years

Total project’s areas equivalents to Portugal, Denmark, Austria

APPROVEDPROJECTS –TERRITORIALCOVERAGE

STATE CAPITALS

RIVERS

ARCO VERDE CITIES

FAS

TNC, OURO VERDE INSTITUTE AND IMAZON

ARPA PROGRAM

LEGAL AMAZON

SELECTEDEUROPEANCOUNTRIES

AREAIN KM2

PORTUGAL 88,800

UNITEDKINGDOM 244,800

ITALY 302,000

GERMANY 357,000

SPAIN 507,000

FRANCE 552,000

APPROVEDPROJECTS –DETAILS

TNC – THE NATURE CONSERVANCY (BRAZIL)AMAZON FUND US$ 9.1 millionTOTAL AREA 120,000 km2 - Larger than AustriaPROJECT The TNC project will encourage environmental

registration of rural producers in 12 municipalities, 7 located in the state of Mato Grosso and 5 located in thestate of Pará. The main productive activities in the areainvolve wood production, cattle-raising and soybeanharvesting.

APPROVEDPROJECTS –DETAILS

IOV – OURO VERDE INSTITUTEAMAZON FUND US$ 3.1 million

PROJECT Stimulate the environmental recovery of degraded areas and help family farms in 6 municipalities located in the extreme North of the state of Mato Grosso, by introducing combined agricultural and forests systems. Such systems allow forest management, agricultural production and animal-raising in the same area in a sustainable way.

APPROVEDPROJECTS –DETAILS

ARPA – PROTECTED AMAZON AREASAMAZON FUND US$ 11.4 millionTOTAL AREA 320,000 km2 - Equivalent to NorwayPROJECT The FUNBIO-ARPA Program halts deforestation by

creating and consolidating new Conservation Units. In its first phase, the project created 62 Conservation Units. The goal now is to support the creation of new Units and consolidate existing ones.

FAS – AMAZONAS SUSTAINABLE FOUNDATIONAMAZON FUND US$ 11 millionTOTAL AREA 100,000 km2 - Equivalent to PortugalPROJECT Expand the Forest Allowance Program (Income and

Association) in Conservation Units of Sustainable Use, in which traditional populations are permitted to remain. The Program’s purpose is to prevent and control deforestation, by providing payment for environmental services, stimulating sustainable productive activities and improving the living standards of the forest population.

APPROVED PROJECTS –DETAILS

IMAZON – AMAZON INSTITUTE OF PEOPLE AND THE ENVIRONMENTAMAZON FUND US$ 5.5 millionTOTAL AREA 66,640 km2 - Equivalent to PortugalPROJECT Mobilization of local society, state and federal

governments in 11 municipalities in the state of Pará. The goal is to collect environmental and land-related data from rural properties and to accelerate the registration of land owners at the Environmental Rural Registry.

APPROVED PROJECTS –DETAILS

In August 2010, the Amazon Fund portfolio contained a total of 78 projects, categorized according to the following criteria:

• distribution of the requested value;

• BNDES’ operational level;

• territorial scope;

• area of activity; and

• operational category

CURRENT PORTFOLIO

Portfolio in 08/31/2010

AC: Acre

AM: Amazonas

MA: Maranhão

MT: Mato Grosso

PA: Pará

TO: Tocantins

RO: Rondônia

RR: Roraima

RJ: Rio de Janeiro

SP: São Paulo

MG: Minas Gerais

BA: Bahia

ES: Espírito Santo

CURRENTPORTFOLIO

CURRENTPORTFOLIO

AC: Acre

AM: Amazonas

MA: Maranhão

MT: Mato Grosso

PA: Pará

TO: Tocantins

RO: Rondônia

RR: Roraima

RJ: Rio de Janeiro

SP: São Paulo

MG: Minas Gerais

BA: Bahia

ES: Espírito Santo

Portfolio in 08/31/2010

CURRENTPORTFOLIO

Portfolio in 08/31/2010

CURRENTPORTFOLIO

Portfolio in 08/31/2010

I management of public forests and

protected areas;

II environmental control, monitoring and

inspection;

III sustainable forestry management;

IV economic activities developed through

the sustainable use of the forest;

V ecological and economic zoning, land-

use planning and land title regularization

VI conservation and sustainable use of

biodiversity; and

VII Recovery of deforested areas.

CURRENTPORTFOLIO

Portfolio in 08/31/2010

AP: Forests and Protected Areas

(Environmental Management and

Services).

APS: Sustainable Production Activities.

S&T: Scientific and Technological

Development applied to the sustainable

use of the biodiversity.

ID: Institutional Development and

enhancing of control mechanisms.

CURRENTPORTFOLIO

Portfolio in 08/31/2010

• Monitoring framework, including project level • Annual Reports• Independent and external financial and compliance

auditing• Diploma issuance to donors.

Transparency and Accountability

• Public information: guidelines’s framework, elegible areas, COFA’s guidelines and priorities, fundamental criterias and general BNDES’s

procedurescurrent portfolio

• Contracts are public

Transparency

Accountability

Dialog and Communication

• Specific Website• Advertising campaign• “Amazon Fund” trademark• Publicity Film• Bulletin Amazon Fund• FAQ• Mail Box (Contact us section)• Amazon under debate

• Donors• Multistakeholders:

Civil society, Brazilian and international NGOsFederal, State and Municipal OrgansAcademia and Specialized InstitutionsPress

Communication

Dialog

TRANSPARENCYAND COMMUNICATION

www.fundoamazonia.gov.br

www.amazonfund.gov.br

Powerpoint

Slide show

Pen drive

Banner

Folder

Releases

Annual report

Advertising Campaign:

COMMUNICATIONPRODUCTS

Land property conflicts and other irregularities

Non-conforming or non-focused proposals

Source of indicators to logical framework

Small-sized projects

International operations

Managing expectations

Multistakeholders dialog

Chalenges

11) Reverse the loss of forest cover through SFM

22) Enhance forest-based economic, social and environmental benefits including improving the livelihoods of forest dependent people

33) Increase the area of protected forests and increase the proportion of forest products from SFM

44) Reverse the decline of ODA for SFM and mobilize new financial resources from all sources for the implementation of SFM

Global Objectives (of SFM)

E Effective implementation of SFM is critically dependent upon adequate resources, capacity development and the transfer of environmentally sound technologies

EEnvironmentally sound technologies are not just individual technologies, but total systems which include know-how, procedures, goods and services, and equipment as well as organizational and managerial procedures

LLikewise, a fund like the Amazon Fund is not just a distribution mechanism . It must comprise a total system’s approach and must deal with the innumerable dimensions of development

SFM contributes to . . . . . . . development goals

● The role of national policies and development strategies cannot be overemphasized

● To maintain and enhance support to analytical work and knowledge generation

● Creating an effective enabling environment for investment in SFM

● Creating an enabling environment for the involvement of and investment by local communities and other forest users

● Encouraging the development of mechanisms, including systems for attributing proper value, to the benefits derived from goods and services provided by forests

● Supporting livelihoods and income diversification from forest products and services for small-scale forest owners

Recognizing, emphasizing, recalling

● The implementation of SFM is critically dependent upon good governance at all levels

Stressing

Noting

● Grants ≠ non-reimbursing loans

● A good idea does not necessarily mean a good project

At its outset, the Amazon Fund must have contributed to bequest to future Amazon generations a whole new array of regionally involved, capable, financially sound, transparent and accountable players able to support a new sustainable development dynamics for the region

The world sponsors it. Brazil tends to it. We all win.

www.fundoamazonia.gov.br

www.amazonfund.gov.br