Client Alerts

Eco Invest Brazil: 5th Auction targets innovation funds following strong capital mobilization in the 4th Auction

July 2nd, 2026

The Executive Secretariat of the Ministry of Finance published Ordinance SE/MF No. 1,782, which regulates Eco Invest Brazil Auction No. 5/2026 – Eco Invest Innovation Funds. The ordinance establishes rules and conditions for participation by financial institutions seeking to access funds in this auction round.

Auction No. 5/2026 seeks to mobilize domestic and foreign private capital for innovative ecological transformation projects structured as sector-specific funds focused on six strategic productive value chains.

Published on June 19, 2026, Ordinance No. 5/2026 also establishes the eligible activities, the final beneficiaries, eligibility criteria, and applicable social and environmental safeguards, in addition to regulating the three incentive mechanisms expected in this round: Eco Invest Innovation Funds, Corporate Credit Instruments, and Non-Reimbursable Support.

Auction Ordinance No. 5/2026 takes effect on July 30, 2026.

How the Eco Invest Brazil Program works

Established by Law No. 14,995, of October 10, 2024, and regulated by MF Ordinance No. 964, of June 11, 2024, Eco Invest Brazil is a pioneering initiative of the Brazilian National Treasury aimed at attracting foreign private investment and mobilizing resources for long-term sustainable projects in Brazil.

Through the program, financial institutions obtain catalytic funds raised by the Climate Fund through on-lending transactions. These funds are leveraged by financial institutions, which invest the catalytic capital alongside private funds they have disbursed or mobilized.

Access to Eco Invest’s catalytic capital is granted through auctions conducted by the National Treasury Secretariat, whose primary selection criterion is the leverage ratio of the funds offered by financial institutions. Each round also required the raising of a minimum percentage of funds in the international market.

The 1st Eco Invest Auction, held on July 11, 2024, supported transition projects without a specific sectoral or regional focus. The 2nd Auction focused on financing projects to restore degraded land. The 3rd Auction promoted equity investments in ecological transition projects across energy transition, bioeconomy, circular economy, and adaptation infrastructure. The 4th Auction consolidated a new thematic focus centered on the bioeconomy, sustainable infrastructure, and tourism, with an emphasis on the Legal Amazon.

In this context, the 5th Auction marks a new phase of the program, aimed at structuring innovation funds and financing strategic technology chains.

Features of Auction No. 5/2026

The activities eligible for Auction No. 5/2026 cover six productive value chains:

Sectors	Eligible activities
Advanced green fuels, biogas, and biomethane	Research, development, scaling, and production of low-carbon fuels (SAF, marine biofuels, e-fuels, biogas, biomethane, and biomass-based solutions). Technologies, equipment, and infrastructure related to the conversion, storage, transportation, and distribution of such fuels. Deployment of pilot plants, demonstration units, and industrial and logistics solutions (including retrofits and expansions) for applications in mobility, industry, and thermal generation.
Low-carbon fertilizers, bioinputs, and alternative proteins	Research, development, and scaling of green fertilizers, biostimulants, biocontrol agents, biopharmaceuticals, and biological or mineral low-carbon inputs. Application of agricultural biotechnology solutions (bioprocesses, fermentation, microbial cultivation, and precision agriculture). Development of alternative proteins and functional ingredients. Deployment of pilot units, demonstration plants, and innovative productive infrastructure associated with these productive value chains.
Biomaterials and green chemistry	Research, development, and scaling of chemical inputs from renewable or low-carbon sources, including intermediates, specialty chemicals, and alternative pathways to fossil-based feedstocks. Application of bioprocesses, green catalysis, and industrial fermentation. Production of biopolymers, bioplastics, resins, and advanced bio-based materials. Development of circular design, ecodesign, and sustainable packaging solutions. Deployment of pilot plants and innovative production infrastructure for the sector.
Processing of critical minerals, batteries, and electric mobility	Technological development related to the extraction, processing, refining, and transformation of critical minerals and strategic materials. Production of advanced materials, electrochemical inputs, and components for industrial and energy applications. Development and integration of batteries and energy storage systems. Manufacturing, assembly, and integration of electrified vehicles and sustainable mobility systems. Deployment of pilot units and innovative production infrastructure associated with the productive value chain.
Circularity of mineral and industrial waste into inputs	Technological solutions for the management, treatment, recycling, and valorization of urban, industrial, mineral, and biological solid waste. Industrial pathways for material recovery and the production of secondary inputs. Reverse logistics, traceability, and reintegration of materials into productive value chains. Technologies for reducing environmental liabilities and improving resource efficiency. Deployment of pilot plants and innovative production infrastructure associated with the circular economy.
Automation and AI for production and technological processes	Automation solutions, artificial intelligence, and advanced digital systems aimed at optimizing industrial and production processes. AI-based systems for measurement, reporting, and verification (MRV), traceability, certification, and social and environmental compliance (including the use of remote sensing and IoT). Data-driven solutions for land-use planning, climate risk modeling, and decision support; integration of digital and green infrastructure (including smart energy management and integration with renewable sources); and the development of predictive models and digital platforms focused on advanced automation, predictive maintenance, and emissions reduction.

Sectors

Eligible activities

Advanced green fuels, biogas, and biomethane

Research, development, scaling, and production of low-carbon fuels (SAF, marine biofuels, e-fuels, biogas, biomethane, and biomass-based solutions).
Technologies, equipment, and infrastructure related to the conversion, storage, transportation, and distribution of such fuels.
Deployment of pilot plants, demonstration units, and industrial and logistics solutions (including retrofits and expansions) for applications in mobility, industry, and thermal generation.

Low-carbon fertilizers, bioinputs, and alternative proteins

Research, development, and scaling of green fertilizers, biostimulants, biocontrol agents, biopharmaceuticals, and biological or mineral low-carbon inputs.
Application of agricultural biotechnology solutions (bioprocesses, fermentation, microbial cultivation, and precision agriculture).
Development of alternative proteins and functional ingredients.
Deployment of pilot units, demonstration plants, and innovative productive infrastructure associated with these productive value chains.

Biomaterials and green chemistry

Research, development, and scaling of chemical inputs from renewable or low-carbon sources, including intermediates, specialty chemicals, and alternative pathways to fossil-based feedstocks.
Application of bioprocesses, green catalysis, and industrial fermentation.
Production of biopolymers, bioplastics, resins, and advanced bio-based materials.
Development of circular design, ecodesign, and sustainable packaging solutions.
Deployment of pilot plants and innovative production infrastructure for the sector.

Processing of critical minerals, batteries, and electric mobility

Technological development related to the extraction, processing, refining, and transformation of critical minerals and strategic materials.
Production of advanced materials, electrochemical inputs, and components for industrial and energy applications.
Development and integration of batteries and energy storage systems.
Manufacturing, assembly, and integration of electrified vehicles and sustainable mobility systems.
Deployment of pilot units and innovative production infrastructure associated with the productive value chain.

Circularity of mineral and industrial waste into inputs

Technological solutions for the management, treatment, recycling, and valorization of urban, industrial, mineral, and biological solid waste.
Industrial pathways for material recovery and the production of secondary inputs.
Reverse logistics, traceability, and reintegration of materials into productive value chains.
Technologies for reducing environmental liabilities and improving resource efficiency.
Deployment of pilot plants and innovative production infrastructure associated with the circular economy.

Automation and AI for production and technological processes

Automation solutions, artificial intelligence, and advanced digital systems aimed at optimizing industrial and production processes.
AI-based systems for measurement, reporting, and verification (MRV), traceability, certification, and social and environmental compliance (including the use of remote sensing and IoT).
Data-driven solutions for land-use planning, climate risk modeling, and decision support; integration of digital and green infrastructure (including smart energy management and integration with renewable sources); and the development of predictive models and digital platforms focused on advanced automation, predictive maintenance, and emissions reduction.

The beneficiaries of Auction No. 5/2026 are legal entities – whether governed by public or private law, domestic or foreign, operating in Brazil – that develop projects in the strategic sectors defined in Auction Ordinance No. 5/2026. The selection process should prioritize innovative companies and ventures at early and intermediate stages, including startups, small and medium-sized enterprises, spin-offs, and projects with high technological and market risks.

Project Maturity

Auction Ordinance No. 5/2026 uses international readiness scales to assess project maturity. The Technology Readiness Level (“TRL”) measures the degree of technological maturity on a scale of 1 to 9, ranging from basic research (TRL 1) to a system that has been tested and is operating successfully in a real-world environment (TRL 9).

The Business Readiness Level (“BRL”) measures the degree of development of the business model and its market readiness, spanning from opportunity identification to commercial validation.

Auction Ordinance No. 5/2026 also employs, within the scope of Non-Reimbursable Support, the Scientific Readiness Level (“SRL”), which assesses the maturity of applied scientific research.

Support Mechanisms

Unlike previous rounds, the 5th Auction adopts three complementary and integrated incentive mechanisms that accompany the projects’ maturity cycle. Thus, as a project matures, it may transition from one mechanism to another:

Non-Reimbursable Support – Initial stage: Applied research and proof of concept

Designed to strengthen the innovation system, this support promotes applied research, human resource development, technological development, and technology-based entrepreneurship in the early stages of maturity (SRL 3 to 6 and/or TRL 1 to 4) – that is, from scientific proof of concept to initial validation in a laboratory setting. Eligible recipients include Scientific, Technological, and Innovation Institutions (“STIs”), educational and research institutions, foundations, civil society organizations, and other entities, as well as individuals involved in programs or projects.

Eco Invest Innovation Funds – Intermediate stages: Validation, demonstration, and scaling of innovative solutions

Investment vehicles structured as funds, with the possibility of multiple classes or subclasses of units (quotas) to accommodate, on a segregated basis, catalytic capital, domestic private capital, and foreign capital mobilized by the financial institution. These funds target projects at early and intermediate stages of maturity (TRL 1 to 7 and/or BRL 3 to 6), ranging from applied research and proof of concept to prototype demonstration in an operational environment, with business models still under development and markets in the process of consolidation.

Within the interaction among classes and subclasses, the catalytic capital class receives resources from the program and allocates them predominantly to low-risk, liquid financial assets, thereby generating financial flows (float). Its function is to mitigate risks and enhance returns for the private investor class, which, in turn, remains exposed to the performance of the investments made in the supported companies.

The classes or subclasses may have distinct rights and obligations, including with respect to priority in amortization and redemption, distribution of proceeds, and allocation of risks and losses, with asset segregation ensured among them.

The target return earned by the financial institution on the quotas acquired with catalytic capital resources is capped at 3% annually, pursuant to CMN Resolution No. 5,130/2024. Also, the use of catalytic capital resources to subsidize higher remuneration is prohibited.

Corporate Credit Instruments – Advanced stage: Implementation and commercial scaling of validated technologies

These instruments are aimed at the implementation, productive integration, and scaling of already validated technologies, with maturity levels compatible with commercial-scale operations (TRL 7 to 9 and/or BRL 7 to 9), that is, technologies that have already been demonstrated and are operating at full scale, with tested business models and established productive value chains.

They are made available to accredited financial institutions acting as originators and structuring agents of credit transactions under a blended-finance framework, with or without foreign exchange protection, and are intended for R&D&I projects and technology expansion initiatives in larger companies. Flexible financial terms are permitted, including freely determined interest rates for the final borrower, as well as the use of program resources to reduce funding costs or mitigate foreign exchange risks.

Participation requirements

Criteria	Minimum requirements
Minimum catalytic capital (Eco Invest Innovation Funds)	BRL 1.5 billion per winning proposal
Financial leverage ratio (Eco Invest Innovation Funds)	Between 1x and 2x the catalytic capital
Minimum catalytic capital (Corporate Credit Line)	Minimum BRL 100 million and maximum BRL 1 billion per proposal
Financial leverage ratio (Corporate Credit Line)	At least 3x the catalytic capital allocated to the instrument
Foreign capital	Line allocated to Eco Invest Innovation Funds: Minimum 15% and maximum 45% of total private capital mobilized Corporate Credit Line: Foreign capital must account for at least 60% of total private capital mobilized
Cooperation with STIs (Eco Invest Innovation Funds)	At least 10% of resources allocated to R&D&I projects in partnership with STIs
Cooperation with STIs (Corporate Credit Line)	At least 5% of the credit portfolio allocated to R&D&I projects in cooperation with STIs
Non-reimbursable counterpart	0.5% of total resources mobilized (catalytic and private capital), of which at least 25% must be allocated to initiatives supporting technology-based entrepreneurship
Conversion remuneration	Capped at the Extended National Consumer Price Index (“IPCA”) + 1% annually

Disbursement schedule and capital mobilization

The disbursement of catalytic capital will take place in three phases:

25% upon ratification of the auction results;
50% upon evidence of the mobilization of at least 25% of the expected private capital, within up to 12 months; and
the remaining 25% upon evidence of the mobilization of at least 75% of such capital.

The effective private capital investment to the Eco Invest Innovation Funds must reach at least 25% within 24 months, 50% within 36 months, and 100% within 60 months, counted from the first disbursement, subject to the proportional return of catalytic capital in the event of non-compliance.

Cooperation with STIs and promotion of productive value chain integration

Consistent with the integration-driven approach adopted in previous rounds, transactions may include a grace period of up to two years, extendable for an additional 12 months. Such extension will be contingent upon demonstrating, within 24 months, that at least 20% of the portfolio reflects integration among the supported productive value chains, evidenced by the complementary nature of the financed solutions, in accordance with objective criteria to be detailed in the Auction Operational Manual.

Proposals

The proposal and the pre-allocation report to be submitted by financial institutions must include, at least:

The proposed financial leverage ratio for each productive value chain covered by the proposal.
The prioritization criterion for each productive value chain, defined as the percentage of investments by the Eco Invest Innovation Funds allocated to R&D&I projects, including cooperation with STIs, technological development, and the internalization of technological capabilities, including through mergers and acquisitions.
The impact ratio for each productive value chain, defined as the percentage of foreign capital participation in the total private capital mobilized, subject to the minimum and maximum thresholds established in Auction Ordinance No. 5/2026.
The order of preference of the productive value chains covered by the proposal.
An indication of the intention to use the extended grace period, pursuant to Auction Ordinance No. 5/2026.
An indication of the activities to which investments from the Eco Invest Innovation Funds will be allocated.
An indication of the activities to which investments from the Corporate Credit Line will be allocated.

Submission deadline

Proposals must be submitted to the Executive Secretariat of the Eco Invest Brazil Program by 6 p.m. (BRT) on August 20, 2026, via e-mail at leilaoecoinvest@tesouro.gov.br. The Executive Secretariat will forward the results of the allocation of resources for ratification by the Executive Committee of the Eco Invest Brazil Program within 20 days from the submission deadline.

The results of the selection process will be published on the Eco Invest Brazil Program’s official website within the same 20-day period, counted from the end of the proposal phase.

Results of the 4th Eco Invest Brazil Auction

The 4th Eco Invest Brazil Auction, regulated by STN/MF Ordinance No. 3,103, of December 5, 2025, attracted eight financial institutions during the proposal submission phase. Four institutions were selected at the ratification stage. Ratified catalytic capital totaled BRL 3.1 billion under the main line and BRL 2.5 billion under the additional line – the latter representing a regulatory innovation introduced in the 4th Auction, aimed at expanding mobilization efforts without affecting the leverage levels proposed by participating financial institutions. Total capital mobilization, including both public and private resources, reached approximately BRL 13.2 billion. The participation of foreign capital amounted to approximately BRL 7.2 billion.

Sectoral allocation shows a concentration in Sustainable Infrastructure, which accounted for approximately BRL 7.9 billion, corresponding to 59.7% of the total mobilized, followed by Bioeconomy with BRL 4.5 billion (33.5%), and, to a lesser extent, Sustainable Tourism, with BRL 900 million (6.8%). Geographical allocation to the Legal Amazon totaled BRL 9.03 billion, reflecting the minimum allocation requirements for projects located in the biome. Of this amount, approximately 87.5% was directed to Infrastructure, 9.9% to Bioeconomy, and 2.6% to Sustainable Tourism.

Among the key regulatory innovations consolidated in the 4th Auction, the following must be highlighted:

The creation of the additional line, which enabled an increase in the supply of catalytic capital without altering core contractual conditions; and
The establishment of a non-reimbursable educational counterpart, totaling BRL 178.3 million for training, applied research, and human capital development initiatives, of which BRL 44.6 million was specifically allocated to the Legal Amazon.

Other Demarest publications on the Eco Invest Brazil Program

For further information, please refer to our additional publications:

Demarest’s Capital Markets, Investment Funds and Asset Management, Tax, and Infrastructure and Project Finance teams are monitoring the topic and remain available to provide any clarifications that may be necessary.