World Bank Approves $592M Plan to Strengthen Amazonas Governance and Bioeconomy

The World Bank Board of Directors has approved a landmark financing package for the State of Amazonas, Brazil, aimed at transforming the region’s environmental governance, strengthening fiscal sustainability, and unlocking new opportunities through the low-carbon bioeconomy. With resources totaling US$592.5 million, the initiative—called AM Pro-Sustainability—is one of the largest operations ever approved by the World Bank for an Amazon state.

A Dual Focus: Fiscal Strength and Environmental Protection

The AM Pro-Sustainability operation adopts an integrated approach, combining fiscal reforms with concrete environmental commitments. By updating fiscal rules to slow the growth of current expenditures, the program will free resources for green investments while ensuring the state’s long-term budgetary stability.

At the same time, environmental policies will be modernized, creating incentives for municipalities and communities to protect forests and reduce deforestation. This linkage between fiscal performance and environmental outcomes represents a new model for sustainable governance in the Amazon.

Key Measures Under AM Pro-Sustainability

The program will roll out a series of reforms and measures designed to build a resilient and sustainable future for Amazonas:

• Stimulating the Bioeconomy: New state laws will encourage small enterprises, cooperatives, and local communities to generate income from sustainable forest products, such as non-timber goods, seeds, agroforestry products, and bio-based innovations.

• Tightening Enforcement: Stronger action will be taken against illegal logging, mining, and land grabbing, addressing some of the most pressing drivers of deforestation.

• Strengthening Climate Resilience: Investments will enhance wildfire prevention and response systems, preparing the state for more frequent and severe climate risks.

• Performance-Based Transfers: State funds will be distributed with a performance-based mechanism, rewarding municipalities that demonstrate stronger environmental results.

• Institutional Modernization: Key environmental agencies, including the Secretariat of Environment of Amazonas (SEMA) and the Amazonas Environmental Protection Institute (IPAAM), will be restructured, with modernized career frameworks and expanded staffing.

• Accessing Climate Finance: Agencies will build capacity to mobilize resources from international climate funds and programs such as jurisdictional REDD+ carbon credits (Reducing Emissions from Deforestation and Forest Degradation).

Voices from Amazonas and the World Bank

Eduardo Taveira, State Secretary for the Environment of Amazonas, called the financing a “historic milestone”: “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.”

Echoing this, Alex Del Giglio, Secretary of Finance of Amazonas, said: “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.”

Jorge Coarasa Bustamante, Interim Country Director for Brazil at the World Bank, emphasized the global significance of the operation: “The Amazon is vital not just for Brazil, but for the planet. 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.”

Financial Innovation: Incentives to Reduce Deforestation

The package also introduces a new mechanism through the World Bank’s Framework for Financial Incentives (FFI). Amazonas will receive US$22 million in performance-based grants, designed as an additional reward for measurable reductions in deforestation over time. This financial innovation could serve as a replicable model for other Amazon states and regions struggling to balance fiscal and environmental priorities.

Aligned With National and Global Goals

AM Pro-Sustainability aligns with Brazil’s Country Partnership Framework (FY24–FY28) and supports the federal government’s Ecological Transformation Plan. It also contributes directly to Brazil’s commitments under the Paris Agreement and the Global Biodiversity Framework, reinforcing the country’s leadership in climate and conservation policy.

Looking Ahead

By combining fiscal discipline, institutional modernization, and environmental commitments, AM Pro-Sustainability aims to strengthen Amazonas’ resilience against deforestation and climate change, while generating inclusive economic opportunities for Indigenous Peoples, smallholders, and traditional forest-dwelling communities.

If successful, the initiative will not only transform Amazonas but could also set a precedent for how states and regions across the Amazon can integrate fiscal reform, climate finance, and sustainable development to achieve both local and global environmental goals.