Rabobank finances US$20 million with ESG targets for plant in MG

Rabobank Brasil structured US$20 million in financing for Bioenergética Aroeira, a company in the sugar-energy sector with operations in Minas Gerais, in an operation linked to the fulfillment of environmental and social goals.

The model, known in the market as Sustainability-Linked Loan (SLL), predicts that the financial conditions of the loan vary according to the company's performance in sustainability indicators.

With a term of five years, the agreement establishes goals related to efficiency in the use of fertilizers, expansion of the use of biomethane in the fleet, increased female participation among employees and expansion of social programs aimed at local communities.

According to Rabobank, the operation reflects the advancement of so-called sustainable finance in Brazilian agribusiness, especially in sectors linked to the energy transition and the reduction of emissions. For Bioenergética Aroeira, this is the first structured funding with ESG criteria linked to financing.

The expectation is that the resources will support initiatives aimed at decarbonization and improving the company's operational efficiency. The sugar-energy sector has been increasing investments in renewable fuels, biomethane and low-carbon agricultural practices in the face of pressure for climate targets and greater environmental traceability.

"The sector already plays a relevant role in the Brazilian energy transition, and operations of this type tend to gain space as investors and banks begin to demand measurable sustainability goals", said Mario Ferreira, head of wholesale at Rabobank Brasil.

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Source: CNN