Supporting BDMG in financing public climate investments in the State of Minas Gerais

A vast inland state in Brazil’s Southeast region, Minas Gerais is known for its historical, cultural, and economic richness. However, it also faces major territorial and social disparities, especially regarding access to basic goods and services such as sanitation, infrastructure, and urban mobility.

To address this situation, the state government has made considerable efforts to reduce regional inequalities, particularly through the development of public investment projects at the municipal level. As a public development bank, BDMG plays a key role in the state’s economic and social development.

Since 2013, AFD has supported BDMG's growth and institutional strengthening by fostering sustainable investment financing in the public and private sectors. These investments offer climate co-benefits and concretely improve the quality of life in Minas Gerais (e.g. water and sanitation, drainage, social infrastructure, public transport).

The first operation – a €31 million credit line and €0.5 million in technical assistance (signed in 2013 and 2014) – laid the foundation for a long-term partnership. It was followed by a second operation (€70 million loan and €4 million grant, signed in 2020 and 2021), aimed at supporting BDMG in implementing a sustainability analysis methodology and developing climate and gender strategies.

The first project contributed to improved urban mobility in central Belo Horizonte by redesigning public transport routes and optimizing traffic and pedestrian flows. It also funded the dredging of the Pampulha basin, with associated lake water treatment and biodiversity monitoring. Other investments supported the maintenance of water supply infrastructure, including treatment plants and the expansion of a distribution network in Juiz de Fora, helping to reduce GHG emissions and enhance climate resilience. The second project enhanced BDMG’s countercyclical role during the COVID-19 crisis and supported actions to address the sanitation crisis in the state.