agosto, 19 2026

By WWF-Brazil

WWF-Brazil presents the report “Blended Finance in Public Policies in Brazil: a window opened by the Tax Reform”, which provides an analysis on the possibility of incorporating blended finance mechanisms into Brazilian public policies, focusing especially on the use of these instruments to reduce risks and mobilize private capital for socioenvironmental projects of public interest.

The report stems from a diagnosis: Brazil faces financing gaps in climate, biodiversity, sanitation, housing, and social infrastructure, and private capital, although abundant, does not spontaneously flow toward these initiatives. This happens because the risk profile (regulatory uncertainty, long terms, foreign exchange, or execution risk) is incompatible with investor requirements.

Therefore, blended finance proves to be a potential avenue for contribution, yet it remains underutilized: the scarcity of risk mitigation instruments is one of the main gaps preventing private flows from unlocking toward high-impact social and environmental projects. The report explores how the Brazilian Tax Reform opens a unique opportunity to build a national blended finance architecture that integrates this risk mitigation component.

The central hypothesis is that this agenda is viable and desirable, since the country has operated domestic forms of mixed finance for decades, such as the Housing Financial System (SFH), constitutional funds, and equalization via the Treasury, among others. The report points toward strengthening this existing ecosystem with risk-sharing mechanisms, complementing a framework that is already sophisticated in tackling the cost of credit – Including recent initiatives like Eco Invest and the Climate Fund – but is still incipient in mitigating risk itself. The obstacles are, first and foremost, institutional rather than conceptual: the agenda requires regulation, federative coordination, technical capacity, and contractual standardization.

Tax Reform

The concrete opportunity is the National Fund for Regional Development (FNDR), created by the Tax Reform, with federal contributions starting at R$ 8 billion in 2029, reaching R$ 40 billion in 2033, and hitting R$ 60 billion annually in 2043, considered so far the largest structured source of capital for sustainable development in recent fiscal history, the report highlights. These resources will be allocated to the States, which opens the possibility of applying them to risk mitigation instruments, such as funding state funds that, in turn, invest in subordinated (first-loss) tranches, attracting private capital to senior tranches.

Thus, the Tax Reform opens an extraordinary window to overcome a long-diagnosed bottleneck in the impact finance agenda: the scarcity of risk mitigation instruments capable of mobilizing private capital at scale. And this is not a speculative bet; the country already masters the engineering of mixed finance. FNDR resources are secured, and the institutional arrangements are known and replicable.

The resources are now available, among instruments, actors, and the political momentum. What will determine a successful outcome is not the volume of capital or the technical refinement of the instruments, but rather the solidity of governance with which the architecture is designed. Three principles are central to this effort, acting as positive success factors: explicit and auditable additionality, socio-environmental safeguards as entry criteria, and transparency as a source of credibility.

By organizing concepts, experiences, and recommendations, the report seeks to contribute to the debate on how Brazil can mobilize private investments with socioenvironmental impact.