(Bloomberg) -- One year after saying Brazil doesn't need money to protect the Amazon, President Jair Bolsonaro's administration now says it expects international donations to the country's Amazon Fund to resume.
Norway and Germany are speaking with Brazil about resuming donations, but the countries are conditioning their contributions on their acceptance of Brazil's deforestation policies, Vice-President Hamilton Mourao told reporters after a video conference Thursday with the chief executive officers of seven European investment funds and one Japanese one.
“It is obvious” that international investors want to see results regarding a reduction in deforestation levels, he said. “If we manage to present something positive in the second half of the year, it is something we can put on the table during talks with the [Amazon] Fund.”
The participants made clear during the meeting that they expect a change of direction in Brazilian policies, said Storebrand Asset Management chief Jan Erik Saugestad. They will continue “to monitor developments in Brazil to assess our exposure to financial risks arising from deforestation,” said SEB Investment Management chief Javiera Ragnartz. And Jeanett Bergan, head of Responsible Investments at Norway-based KLP, said further investments will depend on proven, positive results. Even though no concrete deforestation targets were set out at the meeting, “this was not expected either at this point,” Nordea Asset Management said in a statement.
Changed Tune
Last year after leaders of European countries criticized Brazil's efforts to protect the Amazon, Bolsonaro responded saying Germany has “a lot to learn” from Brazil's environmental policies, and rejected their donations. “They can use this money as they see fit. Brazil doesn't need it,” he said at the time.
The eight global investment funds have blamed Brazilian policies for the spike in deforestation in the Amazon. In June, they sent a letter to Brazil's government demanding environmental policy that would reduce deforestation and fires in the region. Mourao did not elaborate on the country's plans to protect the forest, nor on if Brazil has committed to a percentage for investors. Thus far, the Amazon Fund has disbursed $492 million to projects, according to the Fund's website.
Read more: Funds With $3.7 Trillion Warn Brazil of Investor Backlash (1)
Norway and Germany combined contribute over 90% of the total Amazon Fund managed by Brazil's National Bank for Economic and Social Development (BNDES). However, the two countries suspended transfers last year, after the forest fires crisis and disagreements with the government's environmental policy.
Bolsonaro's government seeks to improve its image on the protection of the Amazon and indigenous people in the face of increasing global criticism and warnings it has received from investors. Next week, the president is expected to decree a “fire moratorium”, forbidding people from starting fires in the Amazon and Pantanal regions for 120 days.
Read more: Bolsonaro Plans to Appease Investors With Ban on Amazon Fires
Read more: Brazil Admits It Has a Deforestation Problem and Vows to Fix It
Brazil Central Bank President Roberto Campos Neto and ministers for the environment, agriculture and foreign affairs attended the virtual meeting as well. The investment funds on the Thursday call were as follows:
- Legal and General Investment Management (U.K.)
- Nordea Asset Management (Sweden)
- SEB Investment Management (Sweden)
- Storebrand Asset Management (Norway)
- KLP (Norway)
- Robeco (The Netherlands)
- AP2 Second Swedish National Pension Fund (Sweden)
- Sumitomo Mitsui Trust Asset Management (Japan)
©2020 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
