Nature-based Solutions (NbS) projects are essential for reconciling environmental preservation with economic development. Despite this, many initiatives face difficulties in securing financing. To address this challenge, the Nature Investment Lab (NIL) held a meeting in São Paulo on September 3, 2025, focused on creating the so-called Guarantee Mechanism for Large-Scale Restoration.
The event brought together 52 participants, including representatives from BNDES, Din4mo, the Climate and Society Institute (iCS), the Tozzini Freire law firm, as well as members of the financial sector and civil society organizations.
The proposed instrument aims to offer guarantees to investors interested in financing NbS initiatives, thereby reducing risks and making contracts more attractive. This could, for instance, help scale up BNDES’s investments in restoration projects through the Climate Fund, which manages reimbursable loans with interest rates ranging from 1% to 9.5% per year.
Still in its structuring phase, the mechanism envisions the use of escrow accounts, administered by third parties and adjusted according to each project’s risk level. The logic is to apply the concept of blended finance to increase contract security and attract new investments. For participants, this type of guarantee is crucial to overcoming long-standing bottlenecks in the forest restoration sector—particularly the challenge of offering solid guarantees to financiers.
Discussions also covered aspects such as governance, project eligibility criteria, and potential technical adjustments. Although some details remain open, the Guarantee Mechanism was regarded as a strategic step toward expanding restoration investments and positioning Brazil as an international leader in NbS.
