By: André Jerusalem
Debentures are credit instruments issued by companies and traded on the capital market. They are securities issued by a corporation, representing debt, which ensures its holders the right to credit against the issuing company, as an instrument for raising funds on the capital market. They are used by companies to finance their projects and also as a way of managing debts.
With the acquisition, the buyer's (or debenture holder's) resources will be used by the company and, therefore, the debenture holder is entitled to remuneration and the investment in debentures is converted into a loan for companies, as long as they are not a financial institution or real estate credit institution.
In the infrastructure sector, debentures can be used to finance infrastructure projects and intensive economic production in research, development and innovation, a modality provided for by Law 11,478/2007, which establishes the Infrastructure Participation Investment Fund and the Investment Fund for Participation in Intensive Economic Production in Research, Development and Innovation.
It is important to note that Bill 2,646/2020 is currently being processed, which creates a type of infrastructure debentures to boost investments in this area, as the new type will grant tax benefits to issuing legal entities, as well as increase the list of infrastructure projects considered as priorities.
It is also important to mention Decree 10,387/2020, which provides for the incentive for environmentally sustainable infrastructure projects, known as incentivized green debentures or green bonds, which includes projects in the urban mobility sectors, such as non-motorized public transport systems and low-carbon public transport; – in the energy sector, projects based on renewable technologies for generating solar, wind and waste energy and small hydroelectric plants with a minimum power density of 4W/m² (four watts per square meter) of flooded area; basic sanitation, water supply, sewage, rainwater management and urban drainage systems and urban solid waste management, as well as projects carried out in substandard agglomerations or isolated urban areas, as they are considered to have social benefits.
In this case, the raising of funds is directed towards environmentally sustainable projects, as the intention is to benefit the environment or mitigate the negative effects of climate change and will only be issued for projects related to the environment, which will be duly monitored, to assess whether the resources raised are actually directed towards projects related to the cause.
According to the Ministry of Mines and Energy, green debentures are expected to boost investments of more than R$170 billion by 2029 in renewable energy sources. Therefore, it is up to the company interested in issuing incentivized debentures to assess the conditions and trends of the growing market and then issue the title and the value of the credit acquisition. Furthermore, by issuing debentures, the State stimulates private investments, both national and international, in infrastructure projects in the country.