The Brazilian government is set to announce a new auction on Monday as part of its Eco Invest Brazil program, expecting to raise $2 billion in financing for sustainable projects. This initiative will focus specifically on recovering degraded pastures, according to officials familiar with the plan.

Treasury Secretary Rogério Ceron stated that Brazil has the capacity to implement the world's largest land-restoration program. "It has a huge environmental impact, enormous international appeal, and many people are seeking us. We aim to recover around 1 million hectares," Ceron told Reuters ahead of the official announcement.

The auction falls under the "blended finance" component of the Eco Invest program, which combines public and private capital. This approach aims to reduce financing costs for sustainable initiatives in the private sector while also minimizing exchange rate risk exposure.

The ministries of Finance, Agriculture and Environment will make the official announcement on Monday. A regulatory decree will be published this week, with financial institutions given 45 days to submit their proposals for participation in the auction.

The government expects to provide approximately $1 billion in catalytic capital from the Climate Fund. Financial institutions participating in the auction will be required to leverage this amount by at least one and a half times, meaning a minimum of $500 million in private resources will be added to the public funding.

Competition among banks could increase the total funding available. Ceron expressed confidence that there is sufficient appetite for leveraging that would match the $1 billion in public capital with an equal amount in private resources, reaching the $2 billion target.

At least 60% of the leveraged capital must come from foreign sources, with the remaining 40% potentially coming from domestic resources. The initiative is part of Brazil's broader ecological transformation plan and will support the National Program for the Conversion of Degraded Pastures launched in 2023, which aims to recover low-productivity lands and expand food production without increasing deforestation.

This environmental initiative comes as Brazil also navigates changing trade dynamics. Following President Trump's recent imposition of tariffs, Agriculture Minister Carlos Favaru stated that Brazil plans to strengthen its BRICS alliance, which now includes ten member countries after Indonesia joined in January 2025.