Dias Carneiro Advogados advised the Inter-American Investment Corporation (IDB Invest) and the Inter-American Development Bank (IDB), as administrator of the Canadian Net-Zero and Climate Resilience Accelerator and the UK Sustainable Infrastructure Program, in a pioneering project finance transaction governed entirely by Brazilian law, structured as a blended finance operation in Brazilian reais and U.S. dollars, with a total amount of up to BRL 116 million (approximately USD 20 million). The financing supports the development, construction, maintenance, and operation of a mechanized solid waste sorting and recovery plant located in the city of Brusque, in the State of Santa Catarina, Brazil.
This is the first IDB Invest transaction structured as a non-recourse project finance under Brazilian law, marking an important milestone for the institution’s operations in the country. The transaction follows the internationally recognized project finance model, with revenues segregated in a special purpose vehicle (SPV), long-term operation and maintenance agreements, and a robust security package, including fiduciary assignments, controlled accounts and direct agreements with counterparties of material project contracts.
The legal and financial complexity of the transaction, combined with its typical project finance contractual framework, demonstrates the growing maturity of the Brazilian market in structuring sophisticated financings in line with international standards. Demarest Advogados acted as counsel to the borrower, Ecotriagem Ltda.
The project, supported by sponsors Repack and Good Karma Fund, aims to expand Brazil’s recycling infrastructure through the implementation of a mechanized plant capable of processing approximately 50 tons of municipal solid waste per hour. The facility will be built within a landfill operated by the French multinational Veolia, which will be responsible for supplying the waste and for the technical operation of the plant.
The initiative was conceived as a circular economy model, focused on recovering recyclable materials (plastics, paper, aluminum, and packaging) that would otherwise be sent to landfills. The recovered materials will be sold under long-term contracts with strategic buyers, ensuring predictable revenues, bankability and financial sustainability of the project. In this way, the structure seeks to create value across the entire recycling chain and contribute to increasing Brazil’s recycling rates, which remain well below legally established targets.
Within the framework of Brazil’s New Sanitation Legal Framework, the project underscores the growth potential of investments in solid waste infrastructure. By promoting the closure of open-air dumps and encouraging the adoption of private landfills and large-scale mechanized sorting technologies, the initiative contributes to the achievement of recycling targets set by law, the reduction of greenhouse gas emissions, and the valorization of waste within the national economy, consolidating a replicable financing model for environmentally and socially impactful projects aligned with the country’s climate commitments.
The closing of the transaction also comes at a moment when Brazil is gaining international prominence in the global climate agenda with the upcoming COP 30 in Belém. IDB Invest and the IDB have played an active role in discussions on climate finance and in promoting sustainable solutions across Latin America, underscoring the importance of initiatives that combine circular economy models, green infrastructure, and innovative project finance structures.
The support provided by the Canadian Net-Zero and Climate Resilience Accelerator and the UK Sustainable Infrastructure Program, together with the project’s financial structure, highlights the ability of IDB Invest and IDB to mobilize international resources through blended finance and positions the Brusque Project as a reference for sustainable recycling infrastructure in Brazil.
Legal Advisors
Advisors to the Inter-American Investment Corporation (IDB Invest) and the Inter-American Development Bank (IDB)
- Dias Carneiro Advogados: Partners Thiago Vallandro Flores, Fernando Gomes and Paulo Leme. Associates Fernanda Savorelli, Ghiovanna Mendes de Almeida and Maria Lorena Borille de Almeida.
