The World Bank Board of Directors has approved a new operation aimed at improving environmental governance and fiscal sustainability in the State of Amazonas, Brazil. The initiative, called AM Pro-Sustainability, is backed by US$592.5 million in Development Policy Financing, making it one of the largest projects ever financed by the World Bank for an Amazon state.
The project seeks to enhance economic opportunities and job creation for local populations, with a focus on Indigenous Peoples, smallholders, and traditional forest communities. The State of Amazonas will introduce new laws to support bioeconomy enterprises, enabling sustainable income from forest products. Measures will also be taken to strengthen enforcement against illegal activities such as logging, mining, and land grabbing. Additionally, wildfire prevention and response systems are set to be upgraded.
A key feature of the program is the use of performance-based transfers that reward municipalities demonstrating improved environmental outcomes. Fiscal policies will be revised to limit current spending growth and allocate more resources toward green investments. Environmental agencies including the Secretariat of Environment of Amazonas (SEMA) and the Amazonas Environmental Protection Institute (IPAAM) will undergo modernization efforts—adopting updated career structures and hiring qualified staff—to better access climate finance mechanisms like jurisdictional REDD+ carbon credits.
“This support from the World Bank is a historic milestone for Amazonas. In addition to representing one of the largest financing ever approved for an Amazonian state, it is innovative by linking mandatory environmental commitments, ensuring that investments translate into stronger environmental governance and new pathways for a low-carbon economy that values and protects our forests and the traditional communities who depend on them,” highlighted Eduardo Taveira, State Secretary for the Environment of Amazonas State.
“The AM Pro-Sustainability marks a historic moment for Amazonas, bringing together one of the largest financing ever granted to an Amazon state with environmental protection and fiscal sustainability,” stated Alex Del Giglio, Secretary of Finance of Amazonas State.
“The Amazon is vital not just for Brazil, but for the planet,” said Jorge Coarasa Bustamante, Interim Country Director for Brazil at the World Bank. “This operation promotes environmental and fiscal sustainability while creating incentives to maintain these policies over time. It combines debt relief with investments in innovation, social inclusion, and public sector resilience.”
As part of this effort, performance-based grants totaling US$22 million from the World Bank’s Framework for Financial Incentives (FFI) will provide additional motivation to reduce deforestation over time. This financial mechanism could serve as a model for other states interested in sustaining long-term environmental policies.
The operation aligns with broader strategies outlined in the World Bank’s Country Partnership Framework for Brazil (FY24–FY28), supports national ecological transformation plans set by Brazil's federal government under international agreements such as the Paris Agreement on climate change goals (https://www.worldbank.org/en/country/brazil/overview).
Further information about this initiative can be found at www.bancomundial.org.br or through their LinkedIn page (https://www.linkedin.com/in/bancomundialbrasil/) or YouTube channel (https://www.youtube.com/bancomundialenamericalatina).