WASHINGTON, DC, MARCH 18, 2025 – The World Bank Board of Directors approved today a major US$1 billion project to support Brazil’s efforts to improve tax and financial stability, promote sustainable finance and environmental protection, and enhance social inclusion.
“This project is part of a broader package of initiatives that the World Bank will deliver to Brazil this fiscal year and is consistent with the current joint strategy with the government, which was launched a year ago,” said Johannes Zutt, World Bank Country Director for Brazil. “The goal is to create a stronger, environmentally friendly, and socially inclusive economy. The project builds on the World Bank Group's long-term discussions with the Brazilian government on tax reform, sustainable finance, and targeted financial support.”
The Brazil Enhancing Productivity, Sustainability, and Inclusion Development Policy Financing (DPF) initiative is expected to make a substantial impact on reducing poverty and inequality. A major element of this project is the reform of the consumption tax, an effort the World Bank has been backing for several years. Through this new initiative, the World Bank will keep offering timely technical assistance to the federal government, which includes providing a tax simulation tool for the excise tax (imposto seletivo).
The initiative will also support the enhancement of social assistance programs and the single social registry (CadUnico). Improvements to CadUnico will enable continuous cross-checking of income assessments for approximately 19 million people.
Additionally, the project will support the re-introduction of the Bolsa Verde Program, which is expected to benefit at least 55,000 families in the Amazon by December 2026, with at least 80 percent of the benefits going to women. This program contributes to forest conservation and alleviates poverty by focusing on areas with high poverty rates among indigenous female-headed households and providing economic compensation to families living in protected areas.
The new project seeks to increase the proportion of federal school feeding resources spent on purchases from family farmers from 40 percent in 2023 to 50 percent by 2026. This move is set to strengthen local economies, support sustainable agricultural practices, enhance the quality and reach of school meals, and ensure that a greater number of students benefit from nutritious food.
Finally, the initiative supports Brazil's multi-year plan for 2024-27 as well as its Ecological Transformation Plan (ETP).
Other Projects for Brazilian States Approved by the Board of Directors
In addition to the US$1 billion Brazil Enhancing Productivity, Sustainability, and Inclusion initiative, the Board of Directors approved five other projects for Brazilian states, totaling US$516 million in financing. These investments support fiscal sustainability, digital transformation, transportation, road safety, and environmental governance, reinforcing Brazil and the World Bank’s commitment to economic growth, social inclusion, and resilience.
Espírito Santo – Road Safety and Resilience
A US$162.4 million investment will enhance road infrastructure resilience and safety in Espírito Santo, where only 33% of roads are in good condition and road fatalities are the highest in Brazil’s Southeast region. The project will introduce bypasses in flood-prone areas, strengthen climate adaptation measures, implement performance-based road maintenance contracts, and promote private-sector investments in road rehabilitation.
Rio Grande do Sul – Fiscal Sustainability and Public Management (Progestão Program)
A US$50 million financing package for Rio Grande do Sul under the Progestão Program, will support fiscal sustainability and public management efficiency. This initiative will help modernize governance structures, optimize public expenditures, and improve financial management in key sectors such as education, health, and social assistance. It will also strengthen human resources, pension systems, and procurement processes, ensuring greater transparency and accountability in public administration.
São Paulo – Metro Line 2 Expansion
A US$250 million investment will support São Paulo’s Green and Resilient Metro Line 2 Extension Project. This project will extend Line 2 by 8.4 kilometers, reducing congestion, shortening commute times, and improving job accessibility for low-income communities. The initiative also incorporates low-carbon solutions like driverless operations and regenerative braking, and will explore public-private partnerships (PPPs) for social housing development along the metro line.
Sergipe – Digital Transformation and Energy Efficiency
With a US$53.6 million investment, the Sergipe Efficient Digital Acceleration Project aims to expand broadband access, modernize public services, and enhance energy efficiency. The project will improve connectivity for schools, hospitals, and public institutions, support cybersecurity and data protection, and introduce digital literacy programs for marginalized communities. Additionally, it includes energy efficiency measures to reduce costs and carbon emissions in public buildings.
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