During the signing of the financing agreement, Alozio Mercadante, President of the Brazilian National Bank for Economic and Social Development, stated, "Railways are a more sustainable mode of transportation that aligns with President Lula's government's policy of transitioning to a green economy

In the central Brazilian state of Mato Grosso, a large amount of grain and pulp are being transported by truck to the port, with high transportation costs continuously eroding the international competitiveness of local products. Recently, this situation is expected to change.

The Brazilian National Bank for Economic and Social Development has promised to provide a total of 3.05 billion Brazilian reals in funding to support two railway projects in the state. These two projects, one serving grain transportation and the other serving pulp exports, will not only significantly reduce transportation costs, but also carry Brazil's strategic intention of transitioning to a green economy.

Two major infrastructure arteries

The investment of the Brazilian National Bank for Economic and Social Development is flowing towards two key transportation arteries. The first total funding of 2 billion Brazilian reals will assist freight operator Rumo in completing the first phase of its Mato Grosso railway project.

This newly laid railway has a total length of 162 kilometers and will connect Londonopolis and Domakuno. It is expected to be completed in the second half of 2026. This is just the beginning of the grand blueprint, and the final plan for the project is to construct a total of 743 kilometers of new lines in five phases.

After completion, it will tightly connect the core grain producing areas in central Brazil to the national railway network. The project also includes the construction of a new logistics terminal near the BR-070 highway, with a designed annual throughput capacity of up to 10 million tons of grain, which is bound to greatly enhance the export competitiveness of agricultural products in Mato Grosso state.

Another financing of 1.05 billion Brazilian reals is directed towards a private project. Led by pulp producer Eldorado Brasil Celulose, there are plans to construct an 86.7-kilometer dedicated railway line. This railway will connect the company's pulp mill located in Treslavguas, Mato Grosso do Sul state with the terminal station of Aparecida Dutabaoda, allowing products to be transported directly through the existing railway network to one of Brazil's most important export gateways - Santos Port.

Win win situation for economy and environment

Brazil's strong investment in railway infrastructure is driven by clear economic and environmental considerations. From an economic perspective, this is a direct response to the logistics bottleneck that has long constrained development. Brazil's transportation system has long relied on highways, and infrastructure bottlenecks and inefficiencies have led to high transportation costs and increased carbon emissions. The President of the Brazilian National Bank for Economic and Social Development has explicitly stated that choosing railways is because it is a "more sustainable mode of transportation".

The research data quantified the benefits of railways: after the planned railway network in Brazil is completed, the transportation of corn and soybeans alone is expected to reduce total freight costs by 17% and reduce the total carbon dioxide emissions generated during transportation by 20%.

These two projects are a microcosm of Brazil's grand railway revitalization plan. The government has announced an ambitious plan to award eight freight railway franchise contracts in batches by 2026, covering a total length of over 9000 kilometers of existing and new lines.

The direct investment scale of these projects is expected to be around 140 billion reais, with the potential to leverage up to 600 billion reais in indirect investment.

Green Transformation Strategy

The advancement of railway projects is closely linked to the government's clear policy of green economic transformation in Lula. The statement by the President of the Brazilian National Bank for Economic and Social Development directly highlights this connection. Its decision-making framework is being clearly guided by national laws. The Federal Law No. 14791/2023, passed in 2023, stipulates that the official financial institution of the Brazilian National Bank for Economic and Social Development must encourage financing for projects that promote energy transition and mitigate the impact of climate change.

The role of the Brazilian National Bank for Economic and Social Development has surpassed traditional infrastructure financing. In March 2025, the bank approved a loan of over 10 billion Brazilian reals specifically for the National Climate Change Fund, with funds focused on expanding renewable energy projects in the northeast and other regions.

As early as January 2025, the bank also collaborated with Brazilian research project funding agencies to allocate 5 billion Brazilian reals specifically to support business plans focused on processing and adding value to strategic minerals (such as raw materials for batteries and photovoltaic cells), directly serving energy transformation and industrial decarbonization.

This indicates that investment in sustainable transportation such as railways is only one component of the overall green finance strategy of the Brazilian National Bank for Economic and Social Development. Brazil is systematically using financial leverage to promote the transformation of its economic structure towards a low-carbon and efficient model.

When the train loaded with soybeans departs from the newly built Mato Grosso railway terminal, and when the President of the Brazilian National Bank for Economic and Social Development signs a new round of green credit documents, the outline of Brazil's transformation is becoming clear. This is not just laying railway tracks, but also laying a track leading to a more competitive and sustainable future. Large scale railway projects and strategic investments in energy transformation are on par, depicting a complete picture of a resource rich country transitioning to a green economic system. Keywords: international news, transportation, railway

This large South American country is trying to prove that economic growth and environmental protection are not Single choice question questions, but efficient logistics systems and clear industrial policies can be the answer to both.Editor/Cheng Liting