BNDES, Latin America’s largest development bank, will not fund new coal- or oil-fired power plants in an attempt to drive investment towards renewable energy.
The Brazilian development bank released a new set of guidelines earlier this week which will see the bank remove all funding available for coal or oil thermoelectric plants, Business Green reports.
It will also reduce credit to new natural gas and hydroelectric plants from 70% of total project investment to 50%.
Support for clean energy projects, such as biomass and solar, will increase, with solar developments for example now able to source 80% of project values from the bank, up from 70%.
The bank will also now finance up to 80% of the cost of energy efficiency projects, such as switching city streetlights over to LEDs.
The new guidelines are designed to help accelerate Brazil's investment in new low-carbon sources of energy as the country strives to meet emissions targets set out under the Paris Agreement.
By 2030, Brazil, which was one of the first large emerging economies to ratify the Paris deal, has promised to source 23% of its energy from clean power.
"The measures aim to contribute to increase alternative energy sources in the Brazilian power mix, directing investments to projects with high social and environmental returns," the bank said in a statement.
The bank will also continue to offer up to 70% of the financing needed for wind, biomass, co-generation plants and small hydroelectric projects.
According to data from Bloomberg New Energy Finance, BNDES has to date arranged almost $25.9 billion (€23bn) of clean energy financing, more than any other organisation in the world.