The IFC (International Finance Corporation) invested US$ 20 million (equivalent to R$ 123 million) to support the growth of Sol Agora – a fintech, belonging to the Descarbonize Group, which offers long-term financing for micro and mini distributed solar energy generation assets throughout Brazil, used mainly by Brazilian homes.
According to the company, IFC acquired senior shares of IS Sol Agora Green II ESG FDIC, the company's second FIDC (Credit Rights Investment Fund), which reached approximately R$900 million in committed capital.
Sol Agora launched its first FIDC in late 2022 and has raised over R$1,4 billion in FIDCs to date, financing over 43 clients across Brazil. The company's FIDCs purchase credits for Brazilian households and small and medium-sized companies originated on its digital platform for the acquisition and installation of photovoltaic equipment.
This partnership is aligned with IFC’s goal to help expand access to climate finance for PV systems, making it accessible to a wider range of customers, including improving financing conditions to make installations more affordable for households and small and medium-sized businesses.
Solar asset-backed securities issued by FIDCs are a developing asset class and capital markets instrument, and IFC’s investment in Sol Agora’s FIDCs will ultimately contribute to strengthening Brazil’s capital markets.
“We are excited to work with Sol Agora to expand financing for solar solutions in Brazil. This initiative contributes to Brazil’s efforts towards sustainable economic growth and climate resilience, supporting the country in its quest to become a global leader on climate issues,” said Manuel Reyes-Retana, IFC Regional Director for South America.
“This investment is perfectly aligned with IFC’s overall strategy for Brazil over the next five years, which focuses on building a more productive, inclusive and green economy,” he added.
Renewables in Brazil
Responsible for around 40% of greenhouse gas emissions in Latin America and the Caribbean, Brazil has committed to reducing emissions by 48% by 2025 and 53% by 2030 compared to 2005 levels.
By 2030, the country aims to increase renewable energy (excluding hydroelectric power) to 45% of its energy mix, up from 22% in 2022, and achieve net zero emissions by 2050. To achieve carbon neutrality by 2050, Brazil needs an estimated annual contribution of 4,3% of GDP between 2022 and 2030, and even more for the period up to 2050.
The IFC estimates that the country has climate-related investment potential of US$1,3 trillion for the period 2016 to 2030. To finance these investments, it is essential to expand access to climate finance.
“Credit is a fundamental pillar to foster the distributed generation market globally, and Brazil is no exception. At Sol Agora, we have assembled a team with a proven track record in the Brazilian credit and capital markets, supported by cutting-edge technology and top-notch governance practices,” highlighted Nuno Verças, CEO of Descarbonize Soluções and Sol Agora.
“The partnership with IFC represents a transformative milestone that reinforces our progress while enhancing our capital structure and fundraising capabilities. With IFC’s unparalleled expertise and global perspective, we are well positioned to scale our impact and navigate future opportunities more effectively,” he concluded.
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