Itaú Unibanco borrows $400m to help fund renewable energy projects in Brazil

Brazilian banking group Itaú Unibanco has borrowed a combined $400m in a bid to help fund renewable energy projects in the drought-stricken country.

The company borrowed the amount from the World Bank’s International Finance as well as a group of commercial lenders.

The transaction comes as the bank steps up lending to projects that cut down costs related to energy generation and usage at factories.

Itaú BBA, the wholesale and investment banking unit of Itaú was involved in the structuring and financing of 42 renewable energy projects, over the past three years.

Itaú BBA head of international financial institutions Carolina Camargo told Reuters: "The deal has a clear focus of bringing energy efficiency to the forefront, as more of our clients are increasingly conscious of the importance of using their resources in the best way possible."

The lender is said to have borrowed $100m from the IFC for five years at an interest of 1.40% point above the benchmark Libor interbank rate.

Banks led by Japan’s Mizuho Financial Group, Bank of America’s BofA Merrill Lynch unit, and Germany’s Commerzbank provided the remaining $300m.