Arnold & Porter Advises Central Bank of Brazil on FX Hedging Conduit with IDB to Mobilize Up to $3.4 Billion for Sustainable Investment

Arnold & Porter represented the Central Bank of Brazil in its agreement with the Inter‑American Development Bank (IDB) to establish an FX Hedging Conduit that will enable long‑dated foreign‑exchange hedging for sustainable infrastructure investment. Under the agreement, the IDB will supply long‑dated derivatives through the Central Bank of Brazil for channeling via local banks to beneficiaries of the Eco Invest program, which facilitates investment in sustainable sectors. The Conduit was announced by the IDB on November 14, 2025, in Belém, Brazil, and is intended to enable up to $3.4 billion in FX hedging to help mobilize private capital for sustainable development. The arrangement connects the IDB to domestic financial institutions while aligning with International Swaps and Derivatives Association (ISDA) standards. It is designed to reduce currency risk for project sponsors and preserve both the Central Bank and the IDB from direct foreign‑exchange exposure. The transaction addresses the longstanding challenge of securing long‑term foreign currency hedge coverage across the sustainable sector and broader infrastructure markets. The addition of the FX Hedging Conduit completes the Eco Invest program’s intended structure by combining FX hedging with blended finance, liquidity tools and a project preparation facility to mobilize private capital toward sustainable investment. Arnold & Porter represented the Central Bank of Brazil with a team composed by: partner Whitney Debevoise (lead) and counsel Arturo Caraballo.

Arnold & Porter Advises Central Bank of Brazil on FX Hedging Conduit with IDB to Mobilize Up to $3.4 Billion for Sustainable Investment

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