The National Bank for Economic and Social Development (BNDES) has approved financing of 87.2 million reais to support the first phase of a large-scale Atlantic Forest restoration project in southern Bahia, Brazil. The initiative will restore approximately 1,300 hectares of degraded land—an area equivalent to around 1,800 football fields—across eight municipalities using more than two million native tree seedlings.
The funding will be provided through Brazil’s Climate Fund, which is linked to the Ministry of Environment and Climate Change (MMA). The fund supports projects aimed at mitigating climate change through activities such as forest conservation, ecosystem restoration, and the sustainable management of native vegetation across Brazilian biomes.
Named the Muçununga Project, after a unique ecosystem found exclusively in this region of the Atlantic Forest, the initiative will be implemented by Biomas and Carbon2Nature Brasil, a joint venture between Neoenergia and Carbon2Nature, a company owned by the Spanish energy group Iberdrola. The restoration activities will take place on land owned by Veracel Celulose.
The project is focused entirely on restoring native forest ecosystems and is expected to deliver significant environmental, social, and economic benefits. By re-establishing native vegetation, the initiative will contribute to tackling both climate change and biodiversity loss while also creating employment opportunities and generating income for local communities.
In addition, the project is expected to produce high-integrity carbon credits, which will serve as its primary source of long-term revenue. Over a period of 40 years, the initiative is projected to generate approximately 500,000 carbon credits.One of the project’s most notable features is its emphasis on biodiversity.
More than 100 native tree species will be used in the restoration process, helping to strengthen ecosystem resilience and recreate more natural forest conditions. This level of species diversity is considerably higher than the global average for carbon-credit-focused restoration projects. According to an MSCI Carbon Markets study, only around 1% of native restoration projects worldwide use more than 10 species.
The restoration efforts will cover areas across the municipalities of Belmonte, Eunápolis, Guaratinga, Itagimirim, Itapebi, Mascote, Potiraguá, and Santa Luzia. The project follows the “stepping stones” restoration model, where restored forest patches act as ecological connection points within a fragmented landscape. These corridors help reconnect habitats and improve wildlife movement, supporting the recovery of threatened species native to the Atlantic Forest.
Among the species expected to benefit are the spotted cotinga, yellow-breasted capuchin monkey, golden-faced lion tamarin, northern muriqui, southeastern curassow, maned sloth, and Brazilwood tree. By reconnecting isolated forest fragments, the project aims to improve ecosystem health and enhance long-term biodiversity conservation in one of the world’s most threatened and biologically rich forests.
BNDES President Aloizio Mercadante described the initiative as an important step in addressing both environmental degradation and the growing impacts of extreme weather events. He noted that restoring the Atlantic Forest, one of the most biodiverse yet heavily degraded biomes in Brazil, is essential for improving environmental conditions and quality of life in local communities.
According to Mercadante, combining forest restoration with job creation and income generation aligns with the government’s broader goals of promoting sustainable development while strengthening climate resilience.Neoenergia CEO Eduardo Capelastegui highlighted the importance of Climate Fund financing in making large-scale restoration projects financially viable. He stated that the funding reinforces the effectiveness of the Carbon2Nature and Neoenergia model and will help accelerate future restoration initiatives in Brazil.
According to Capelastegui, the project will contribute not only to carbon removal and biodiversity conservation but also to social development through increased employability and stronger community engagement.He added that the initiative reflects Neoenergia’s commitment to expanding environmental and social benefits in the regions where it operates, particularly in Bahia, where the company has significant activities in electricity distribution, generation, and transmission.
Fabio Sakamoto, CEO of Biomas, emphasized that long-term financing is essential for scaling up forest restoration projects. He noted that, much like infrastructure developments, ecological restoration requires substantial capital investments and extended implementation timelines. Sakamoto pointed out that Brazil possesses several advantages, including vast biodiversity, extensive expertise in forest restoration, and large areas suitable for reforestation.
However, he stressed that effective financing mechanisms are necessary to unlock this potential and position Brazil as a global leader in nature-based climate solutions.Beyond its environmental objectives, the Muçununga Project places strong emphasis on community development. Local residents were actively involved in shaping project initiatives through collaborative workshops, ensuring that restoration activities align with local needs and priorities.
In total, 14 surrounding communities are expected to benefit from programs focused on income generation, improved infrastructure, community development, and overall well-being.By combining large-scale ecological restoration with biodiversity conservation, carbon removal, and community engagement, the Muçununga Project represents an integrated approach to addressing climate, environmental, and social challenges while supporting the long-term recovery of one of Brazil’s most important ecosystems.
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