UPDATE 1-Brazil plans September roadshow for first sovereign green bonds -Treasury secretary
Rewritten: The blog post has been updated with fresh remarks from the Secretary of Treasury to provide more context.
On the 23rd of June in Brasilia, according to Reuters, a certain event occurred.
The Brazilian government is planning to kick off a roadshow in September to introduce their first-ever release of ESG-compliant sovereign bonds. Treasury Secretary Rogerio Ceron expressed optimism that the venture will exceed the $1 billion mark.
The authorities had previously made it known that they planned on releasing a sustainable investment opportunity known as a green bond.
During an interview with Exame, Ceron highlighted that the primary objective of the operation is to set a standard for private issuances supported by environmental, social, and governance (ESG) practices.
He mentioned that this would bring in a hefty amount of investment into the nation.
The federal government budget would support the issuance of sovereign bonds.
Distributions or provisions for the purpose of promoting sustainable development.
President Luiz Inacio Lula da Silva is taking measures and initiatives centered around environmental and social issues, with the aim of embracing the shift towards a sustainable economy as the main focus of the country's development policy.
Ceron said that the administration has already obtained roughly 100 billion reais ($21 billion) of extra revenue for 2024 using measures that were previously revealed, but there are more actions being developed that deal with tax expenses. The government is planning to disclose these measures towards the end of the year.
Ceron mentioned that closed-end funds, which are a beneficial investment option for affluent Brazilians as they levy taxes only when profits are given to investors, are being scrutinized. Changes to this method of taxation could be implemented.
Raising the amount of taxes collected is seen as very important for keeping the fresh fiscal rules set by the government, which are intended to prevent a huge amount of public debt after Lula increased spending on social programs in order to honor his campaign pledges.
they are set to be implemented. These regulations will have a major impact on how government agencies spend their budgets. The focus will be on reducing unnecessary spending and increasing transparency. This means that agencies will have to prioritize their spending and be more accountable to the taxpayers. The Senate has given the green light to the new fiscal regulations, which will soon come into effect. The regulations are aimed at changing the way government agencies handle their budgets. The emphasis is on curbing wasteful spending and ensuring greater clarity in expenditure. Consequently, the agencies will need to be careful in how they spend their budget, and they will need to account for every penny spent, given that it is the taxpayers' money.
Waiting for a conclusive decision
In the chamber of representatives.
According to Ceron, the Treasury has worked out that the central government will have a primary shortfall of 100 billion reais in 2021, which works out to 1% of GDP. However, this amount may end up being less. With the introduction of the new fiscal regulations, the government is aiming to eliminate the deficit entirely by next year.
Marcela Ayres reported that as of now, one US dollar is worth 4.7785 Brazilian reais.
