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Eco Invest Brazil: Second Auction boosts restoration of degraded land and mobilizes capital for the agricultural sector
July 8th, 2026
Focused on restoring degraded areas, the Second Eco Invest Auction seeks to attract domestic and foreign private investment for ecological transformation and sustainable production projects in Brazil.
The National Treasury Secretariat published Ordinance STN/MF No. 926, dated April 28, 2025, which regulates Eco Invest Brazil Auction No. 2/2025, aimed at financing projects to restore degraded areas and convert them into sustainable production systems. The auction’s objective is to mobilize public and private funds to support the restoration of up to one million hectares of degraded land throughout the country.
STN/MF Ordinance No. 926 establishes the rules and conditions for participation by financial institutions interested in accessing funds from Auction No. 2/2025, as well as the eligibility criteria applicable to the financed operations.
The measure is part of the Ministry of Finance’s Ecological Transformation Plan – New Brazil and aims to boost the mobilization of private capital to finance large-scale sustainable investments in the country.
How the Eco Invest Brazil Program works
Established by Law No. 14,995 of October 10, 2024, and regulated by Ministry of Finance Ordinance No. 964 of June 11, 2024, Eco Invest Brazil is a pioneering initiative of the National Treasury that seeks to create structural conditions for foreign private investment and mobilize funds for sustainable, long-term projects in Brazil.
Through the program, financial institutions obtain catalytic funds raised by the Climate Fund via on-lending operations. These funds are leveraged by the financial institutions, which invest the catalytic capital alongside private funds they disburse or mobilize.
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 foreign market.
The 1st Eco Invest Brazil Auction, held on July 11, 2024, marked the launch of the program’s blended finance sub-line and recorded a demand for BRL 6.8 billion in catalytic funds, with the potential to mobilize approximately BRL 44.6 billion in new sustainable investments. Without focusing on specific sectors or regions, the projected funds were concentrated primarily in energy transition projects (BRL 21.9 billion), followed by circular economy initiatives (BRL 13 billion), the bioeconomy (BRL 5.3 billion), and infrastructure and climate change adaptation (BRL 4.4 billion). Among the 23 proposals received, the largest structure offered leverage equivalent to ten times the required catalytic capital.
Characteristics of Auction No. 2/2025
Activities eligible for Auction No. 2/2025 encompass various production models aimed at the restoration of degraded land:
| Eligible Activities | Description |
| Integrated Agricultural and Livestock Production Systems (“SIPAs”) | Sustainable integration of agriculture, livestock, and forests, including ILPF (Integrated Crop-Livestock-Forest) systems and SAFs (Agroforestry Systems). During the first three years, the separate management of crop and livestock activities is permitted as a transitional phase toward the integrated system. |
| Perennial Crops | Crops that remain productive for several years after initial planting, in accordance with the principles of regenerative agriculture and recognized sustainable practices. |
| Forests and Restoration | Projects involving natural or induced regeneration, forest management, and cultivation, including the restoration of degraded areas and the planting of commercial or native forest species. |
| Livestock and Annual Cropping as Stand-Alone Activities | Activities conducted in isolation, provided they promote improved soil health, increased productivity, and sustainable land use. For producers who do not qualify as small- or medium-scale producers, an additional requirement to expand the property’s permanent vegetation cover applies. |
Final Beneficiaries
The following beneficiaries may access funds from Auction No. 2/2025:
| Category | Description |
| Rural producers | Individuals or legal entities directly engaged in agricultural production. |
| Cooperatives of rural producers | Cooperatives operating as rural producers. |
| Cooperatives and anchor companies | Entities integrated into agribusiness supply chains that maintain a direct relationship with rural producers or cooperatives, including through supply contracts, technical assistance, marketing, or production support. |
In addition, financial institutions may establish partnerships with input manufacturers, traders, cooperatives, associations, nongovernmental organizations, and research or educational institutions to support the implementation of the financed projects.
Eligibility requirements
Below, we highlight some of the main conditions for accessing the blended finance sub-line of Auction No. 2/2025:
| Criterion | Minimum Requirement / Specific Condition |
| Financial Leverage Ratio | Equal to or greater than 1.5x. |
| Foreign Capital | At least 60% of the private funds raised must be sourced from abroad. |
| Food and Animal Protein Production | At least 50% of the total funds mobilized must be allocated to projects aimed at expanding food and animal protein production. |
| Caatinga Biome | At least 10% of the total funds mobilized must be allocated to projects located in the Caatinga. |
| Currency Hedge | Currency hedging for at least 60% of funds raised abroad, unless a natural hedge exists. |
| Deforestation | Commitment to zero legal deforestation on financed real properties and no financing for projects located in areas with a history of illegal deforestation. |
| Grace Period | A 2-year grace period for operations. |
| Extended Grace Period | An additional 12-month grace period for financial institutions that allocate at least 30% of the mobilized funds to investment funds dedicated to the restoration of degraded land (“Eco Invest Brazil Funds”). |
Eligibility criteria and socio-environmental safeguards
In addition to the general requirements of the Eco Invest Brazil Program, the ordinance establishes additional eligibility criteria and safeguards aimed at ensuring the environmental integrity of the financed projects.
Among the eligibility criteria, we highlight the following:
- Identification of the real property benefiting from the project through the respective Rural Environmental Registry (“CAR”);
- Maintenance of active registration in the CAR;
- No deforestation on the real property since December 6, 2023, and throughout the duration of the operation;
- Proof of the area’s degraded condition through a technical soil health report; and
- Compatibility between the term of the lease agreement and the term of the credit operation, where applicable.
In addition, the following socio-environmental safeguards apply:
| Safeguard | Requirement |
| Undesignated public forests | Prohibition on financing real properties located in undesignated public forests. |
| Conservation areas | Prohibition, except when the economic activity is permitted by the respective management plan. |
| Indigenous land and Quilombola territories | Prohibition, except when the beneficiary is a member of such communities and the activity is permitted. |
| Environmental restrictions | Prohibition on financing real properties subject to active environmental injunctions. |
| Illegal deforestation | Prohibition on financing real properties with a record of illegal deforestation after July 22, 2008. |
Submission deadline
Proposals were submitted to the National Treasury Secretariat by 6:00 p.m. (Brasília time) on July 21, 2025. The ordinance provided for the announcement of the selection results within 20 days after the deadline for submitting proposals.
Results of the Second Eco Invest Brazil Auction
The Second Eco Invest Brazil Auction was attended by 11 financial institutions and recorded a demand for BRL 17.3 billion in catalytic funds. Of the total amount requested, BRL 16.5 billion was awarded through the public catalytic capital line, enabling approximately BRL 30.2 billion in investments aimed at the productive restoration of about 1.4 million hectares of degraded land across Brazil. The funds are expected to be disbursed throughout 2025, 2026, and 2027, with a focus on financing projects that promote sustainable land use and increase agricultural productivity.
Of the total private funds to be mobilized – estimated at BRL 13.7 billion – approximately BRL 8.25 billion is expected to be raised in the foreign market and BRL 5.4 billion in the domestic market.
The allocation structure for the approved funds combines direct credit operations and investment vehicles. Approximately BRL 24.4 billion is expected to be disbursed through direct operations with the final beneficiaries, while about BRL 5.9 billion will be allocated through Eco Invest Brazil Funds.
The indicative distribution of investments shows a concentration in the Cerrado biome, which is expected to receive approximately 57% of the mobilized funds. Next are the Atlantic Forest (13%), the Amazon (12%), and the Caatinga (10%), while Pampa and Pantanal are expected to receive about 4% each.
Regarding eligible activities, the approved proposals indicated a greater allocation of funds to perennial crops, which account for approximately 33% of the projected allocation, followed by integrated agricultural, livestock, and forestry production systems, totaling 29%. Projects focused on livestock or annual crops conducted in isolation account for approximately 27% of the indicated investments, while activities related to forests and restoration represent about 11% of the projected funds.
Operational Manual
Access more information on the operational rules applicable to Auction No. 2/2025: Eco Invest Brazil Auction No. 2/2025 Operational Manual.
Other Demarest publications on the Eco Invest Brazil Program
For in-depth information, please refer to our additional publications:
- Ministry of Finance publishes ordinance that regulates the first “Eco Invest Brazil” auction
- National Treasury publishes ordinance for the 3rd Eco Invest Brazil Auction to attract private equity investment in ecological transformation projects
- After the success of the 3rd Eco Invest Brazil Auction, the 4th edition aims to attract private investment in bioeconomy and sustainable tourism in the Amazon
- Brazilian Securities Commission (CVM) introduces regulatory flexibility for investment funds to receive resources from the Eco Invest Brazil Program
- Eco Invest Brazil: 5th Auction targets innovation funds following strong capital mobilization in the 4th Auction
- Agribusiness Newsletter | November and December 2025Agribusiness Newsletter | November and December 2025 – Article: Agribusiness Newsletter | November and December 2025 – Third Eco Invest Auction creates opportunities for the agribusiness sector
- ESG Newsletter – January 2026
- Agribusiness Newsletter | March 2026 – Article: CVM issues ruling in support of the Eco Invest Program
- Energy and Natural Resources Newsletter | May 2026
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 necessary clarifications.
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