Brazil launches finance model for electric buses
The fund’s objective is to mobilise around €450 million in private investment and reduce financial risk for lenders, enabling cities and bus operators to access more affordable loans. It combines public and philanthropic first-loss capital with an anchor investment from Brazilian investment bank BTG Pactual, creating improved financing conditions for operators. In practice, if a borrower defaults, the first-loss capital absorbs the initial losses, increasing lender confidence to offer loans at lower interest rates and with longer maturities.
The scheme, announced during COP30 in Brazil, is supported by Bloomberg Philanthropies, the Ministry of Cities, the Ministry of Environment and Climate Change, the Mitigation Action Facility, and WRI Brasil. BTG Pactual is providing €24 million as the anchor investor.
The Mitigation Action Facility has also granted project preparation funding to WRI Brasil to set up a €25 million support programme, including €16 million in first-loss capital and €9 million in technical assistance. This funding will help cities develop policy frameworks and strengthen local e-bus manufacturing capacity. Rio de Janeiro, Salvador, Curitiba, and Belo Horizonte are expected to be among the first cities to benefit.
“This initiative represents a practical step toward cleaner and more efficient urban mobility,” said Roberto Sallouti, CEO of BTG Pactual. “Supporting the transition from diesel to electric buses helps reduce emissions, improve air quality, and modernise public transport systems.”
Michael R. Bloomberg, UN Secretary-General’s Special Envoy on Climate Ambition and Solutions, said the collaboration demonstrates how local and private sector leadership can drive national progress. “This fund will help to deploy zero-emissions buses in cities across the country, while also sending a message to the world that when it comes to global progress, the more nations look to local and private sector leaders as full partners, the faster we’ll move.”
Brazil’s Minister of Cities, Jader Barbalho Filho, said the initiative builds on the federal government’s commitment to decarbonising urban mobility. “It exemplifies how the urban agenda is not only central to achieving our climate goals, but also instrumental in driving mitigation, adaptation, and resilience measures,” he said.
“The Brazil E-Bus Credit Enhancement Fund is envisaged as a pivotal step toward sustainable urban mobility,” said Dr Sören David, Head of the Technical Support Unit at the Mitigation Action Facility. “By supporting operators in the transition from internal combustion to electric buses, it seeks to reduce emissions, strengthen local manufacturing, and foster knowledge sharing across cities.”
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