Iberdrola’s Neoenergia, Carbon2Nature Secure $16 Million To Restore Brazil’s Atlantic Forest

Neoenergia secured €14.8 million, about $16 million, from BNDES to support the Muçununga Project in Brazil’s Atlantic Forest.
The first phase will restore 1,300 hectares in southern Bahia and plant more than two million native trees.
Fourteen communities will take part in programs focused on wellbeing, income generation and local development.

Neoenergia Advances Forest Restoration in Bahia

Neoenergia, Iberdrola’s Brazilian subsidiary, has secured €14.8 million in financing from Brazil’s National Bank for Economic and Social Development to support a large-scale Atlantic Forest restoration project.

The funding will back the Muçununga Project, an ecological restoration initiative led by Carbon2Nature Brasil and Biomas. Carbon2Nature Brasil is a joint initiative between Neoenergia and Carbon2Nature, Iberdrola’s nature-based solutions platform.

The project is designed to restore degraded land in one of the world’s richest, and most threatened, ecosystems. In its first phase, it will recover 1,300 hectares in southern Bahia. More than two million native trees will be planted across the restoration area.

The initiative places Iberdrola and Neoenergia deeper into Brazil’s fast-growing market for nature-based climate solutions. It also reflects rising demand for restoration projects that combine biodiversity, carbon sequestration and community benefits.

Native Species and High-Integrity Carbon Credits

The Muçununga Project will focus on native species rather than monoculture planting. That approach is central to its climate and biodiversity value.

By rebuilding forest cover with local species, the project aims to support carbon removal while restoring habitats. It will also help improve ecological resilience in a biome that has faced decades of pressure from land conversion, urban growth and agricultural expansion.

Carbon2Nature Brasil is also seeking to generate high-integrity carbon credits from the restoration work. That will be closely watched by companies and investors as voluntary carbon markets face stronger scrutiny over quality, permanence and social safeguards.

For corporate buyers, the project could offer credits linked to measurable restoration outcomes. For policymakers and lenders, it provides a model for financing climate action through projects that also protect biodiversity.

The BNDES financing adds a public finance layer to the initiative. That matters for Brazil, where the success of large restoration efforts often depends on blended capital, long-term governance and credible monitoring.

Biodiversity Gains in a Threatened Ecosystem

The Atlantic Forest is among Brazil’s most important ecosystems. It is also one of its most fragmented.

Restoring land in southern Bahia can help reconnect habitats and support vulnerable species. The project is expected to improve ecosystem resilience by rebuilding native vegetation and improving the health of degraded areas.

Those biodiversity gains are important for companies that face growing pressure to move beyond carbon-only climate strategies. Investors are also watching nature-related risks more closely, especially as global frameworks push businesses to assess their exposure to biodiversity loss.

For Iberdrola, the project strengthens a wider approach to climate action that includes renewable energy, grid investment and nature-based solutions. It also gives Neoenergia a clearer role in Brazil’s restoration agenda.

Local Communities Built Into the Model

The project also carries a strong social component. Fourteen communities will participate in programs focused on wellbeing, income generation and community development.

That design gives the Muçununga Project relevance beyond carbon markets. It links ecological restoration to local employment and economic opportunity, which is increasingly critical for project credibility.

Nature-based projects can fail when local communities are treated only as stakeholders. This initiative positions them as part of the project’s operating model.

For executives, the lesson is clear. Climate and nature strategies are becoming harder to separate from social impact. Projects that can show local benefits may be better placed to attract capital, policy support and buyer confidence.

What Executives Should Watch

The Muçununga Project offers a useful case study for companies building nature-based climate strategies in emerging markets. It combines development bank finance, corporate climate ambition, biodiversity restoration and community participation.

That mix could become more important as carbon markets mature. Buyers are under pressure to avoid low-quality credits. Banks and investors are looking for projects with stronger governance. Regulators are demanding clearer proof of climate and social value.

Brazil remains central to that shift. The country holds some of the world’s most important ecosystems and one of the largest opportunities for restoration finance.

For Iberdrola and Neoenergia, the project expands their role in Brazil’s climate and nature agenda. For the wider market, it shows how restoration finance can move beyond tree planting and into a more integrated model for carbon, biodiversity and regional development.