Brazil – Industrial Energy Efficiency
Transformative Investments for Energy Efficiency in Industries in Brazil (PotencializEE)
PotencializEE is unlocking Brazil’s vast potential for industrial energy efficiency by supporting SMEs, financial institutions, and policymakers in scaling low-carbon investments. Through innovative financing mechanisms and technical support, the programme helps reduce emissions while strengthening industrial competitiveness.
Context
Industry accounts for one third of Brazil’s annual energy consumption and around 8% of national GHG emissions, amounting to 183 million tCO2e per year.
Despite existing policies, regulations, and funding mechanisms, the energy efficiency (EE) market remains underdeveloped. Small and medium-sized enterprises (SMEs) often lack access to affordable finance and technical support, while local banks have limited experience in assessing EE projects.
The project aims to unlock Brazil’s vast potential for industrial EE by strengthening financial, technical, and policy capacities, driving investments that reduce GHG emissions and improve industrial competitiveness.
“The government is a key facilitator in tackling climate change. Brazil has ambitious commitments under the Paris Agreement and is taking effective and efficient measures to boost its climate ambition. The PotencializEE programme is an example and a call to action for other countries to support us. Industrial decarbonisation requires different ministries in developing key interconnected and feasible policies.”
A highlight from 2025
Backed by strong political support, PotencializEE is being expanded to at least five additional states, demonstrating the programme’s growing national impact. Major development banks, including BNDES and FINEP, introduced new financial products for energy efficiency investments based on the programme’s eligibility criteria. To improve SME access to finance, Brazil launched its first energy efficiency-focused guarantee mechanisms, FAEE and FGEnergia, helping reduce collateral barriers for industrial investments.
The project also contributed to the Ministry of Mines and Energy’s decision to initiate a regulatory impact assessment for a national thermal energy efficiency policy, with PotencializEE continuing to provide technical expertise to support future regulation.
Outlook to 2026
In early 2026, the Minister of Mines and Energy, Alexandre Silveira, signed an agreement that officially expands PotencializEE to the national level, with an initial investment of R$ 75 million for energy audits of the National Service for Industrial Training (SENAI) aimed at supporting micro, small and medium‑sized industrial enterprises across the country.
Read more here.
Why this matters
The project demonstrates how targeted climate finance can catalyse long-term industrial decarbonisation and support the implementation of Brazil’s Nationally Determined Contributions (NDCs). By combining technical assistance, policy support, and innovative financial instruments such as guarantee funds and tailored credit lines, the project addresses key market barriers that have historically limited energy efficiency investments in Brazil’s industrial sector. PotencializEE strengthens the capacity of banks, energy service companies, and SMEs to develop and finance bankable energy efficiency projects, helping to mobilise significant private sector investment and create a sustainable pipeline of low-carbon industrial upgrades.
Learn more about the Brazil case in our 2025 publication: “From grants to guarantees: How the Mitigation Action Facility’s financial mechanisms transform NDC ambition into climate action“