Introduction and Background:
The transport sector accounts for 44% of Brazil’s energy related GHG emissions, making it a critical area for decarbonisation. Public road-based bus systems meet 86% of urban transport demand and with over 80% of electricity already sourced from renewables, Brazil is well-positioned to lead in sustainable urban mobility. Recognising this potential, the government is advancing initiatives like the New Industry Plan and Green Mobility Program to support low-emission vehicle production and adoption. The project builds on these efforts, aiming to scale up electric bus manufacturing and adoption, enhance capacity for electromobility, and foster gender inclusion, contributing to Brazil’s climate goals and sustainable urban development.
Project Goals and Approach to Transformational Change:
The project aims to replace 1,739 internal combustion engine (ICE) buses with electric buses (e-buses) in 3 Brazilian cities, contributing to long-term emissions reductions and advancing sustainable urban mobility. It will focus on strengthening financial and policy frameworks at municipal and national level. To foster the development of e-bus production capabilities, it will also provide technical support to local manufacturing industry, ensuring that Brazilian manufacturers can meet the national demand for electric buses and play a key role in the country’s shift toward sustainable public transport. Another key transformative element is the knowledge-sharing approach between cities, enabling municipalities to exchange best practices and accelerate the nationwide transition to electric mobility.
Project Components and Support Mechanisms
The financial cooperation (FC) component will make investment in e-bus fleets and other GHG mitigation efforts more attractive to both public and private sectors by reducing financial risk. The key mechanism is a first loss guarantee scheme, which acts as a safety net by covering initial losses, thereby lowering the risk for investors. Moreover, the mechanism aims to create a stable market for e-buses by securing long-term contracts and government commitments, providing the private sector with the certainty it needs to invest.
The technical cooperation (TC) component focuses on creating a supportive ecosystem for electric mobility, involving local governments and municipalities through training and capacity-building programs. It aims to integrate advanced technologies, promote gender equity in the workforce, and establish a diversified public transport sector.
Mitigation Potential and Long-Term Impact:
It is estimated that the project could directly reduce 394,385 tCO2e during its implementation timeline and more than 2,700,000 tCO2e over lifetime of the supported technologies. The cost efficiency is 9 EUR/tCO2e.