Brazil's Bndes backs reforestation firm

Brazil's Bndes development bank approved R160mn ($28.7mn) in financing for reforestation company Mombak, which will use the funding for projects in Para state that will generate carbon offsets to be sold in the international market.

The company has planted over 3mn native tree species in Para as part of its broader efforts to recover degraded areas in the Amazon basin where deforestation levels are highest.

Mombak will receive R80mn from the Bndes' Climate fund and another R80mn from the banks' Finem line of credit.

This is not Mobak's first project to sell carbon offsets. The company has a deal with Microsoft for 1.5mn offsets and with automobile racing firm McLaren.

The funding is part of a partnership between Bndes and the environment ministry to reduce deforestation in an area known as the "deforestation arch" in the Amazon, with the goal of recovering 6mn hectares (ha) of degraded area in this region by 2030 and 18mn ha by 2050. This environmentally vulnerable region has received R1bn in financing since it was officially targeted at the Cop 28 UN climate talks.

Mombak was founded in 2021 by former executives from Brazilian tech companies 99 and Nubank. The company has raised roughly R1bn in capital to invest in reforestation projects.

It also received backing from the Canada Pension Plan Investment Board, Bain Capital, French insurance company AXA and the Rockefeller Foundation.