Brazilian bank BTG Pactual has intensified its efforts in recent years to help clients on their journey to sustainable business models.
The process has resulted in an impressive list of sustainable infrastructure financings and renewable energy deals. The firm, which wins the award for Sustainable Infrastructure Bank of the Year, helped arrange no less than two dozen bonds tagged as sustainable, green or blue, totalling more than $7.9 billion, in the 12 months through May 31.
Energy and infrastructure developer clients who trusted the bank to issue such bonds include water and sanitation companies such as AEGEA, Rio+ and Iguá Saneamento, agribusiness giants like Raízen and energy firms like Eletrobras, ISA Cteep and Faro Energia.
BTG Pactual also helped raise money for 18 renewable energy projects in the period, totalling $3.16 billion in financing for the likes of Casa dos Ventos, Engie and Eletrobras.
Such an outcome reflects the investments made by the São Paulo-based bank in developing services to help clients navigate the sustainability transition.
The bank moved early to set up a Sustainable and Impact Investments division, in 2020. Since then, head of department Mariana Sang observes that issuers have become ever more willing to align their capital raising efforts to sustainable criteria.
“Some companies are well prepared when they come to us. They already have a sustainability report, the ESG framework is ready, and they know where the money will be allocated,” she says. “But sometimes clients do not realize that they can add a sustainable tag to their issuances. Then we help them to identify the green or blue elements of their businesses so that they can access other pools of investors.”
Sang says, however, that the market still needs to reward sustainable issuance in a more consistent way.
“We still do not see a premium being paid for sustainable issuances,” she points out. “It remains more a strategic and reputational factor than a financial one. Brazilian investors still look first at the return of their investments, so we do not have an impact first approach, we structure debt issuances that are compatible with others that hit the market.”
Most of the bank’s sustainability work is developed in its home market of Brazil, but it is starting to spread to other countries where BTG Pactual operates. Head of Project Finance Gustavo Fava recalls, for example, that the bank worked on the issuance of a bond by a road project in Colombia that obtained a social tag.
He also stresses that investment is flowing to new sustainable activities, such as the production of thermal energy by burning urban waste. In early August, BTG Pactual was one of the coordinators of an 18-year, R$395 million green infrastructure debenture issued by Barueri Energia Renovável, which will use the money to fund the construction of one such plant in the state of São Paulo.
“It is a great project with an unbelievable social impact,” Fava says.
