Arnold & Porter Represents Central Bank of Brazil in Developing FX Hedging System for Infrastructure Investment

Arnold & Porter recently advised the Central Bank of Brazil on its agreement with the Inter-American Development Bank (IDB), which will enable up to $3.4 billion in foreign-exchange (FX) hedging to help mobilize private investment for sustainable development in Brazil.

Under the agreement, which establishes an FX Hedging Conduit, IDB will supply long-dated derivatives through the Central Bank for channeling via local banks to beneficiaries of Brazil’s Eco Invest program, which facilitates investment in sustainable sectors. The IDB announced the Conduit facility on November 14, 2025, in Belém, Brazil.

This system, and the inclusion of the Central Bank, connects the IDB to domestic financial institutions while aligning with International Swaps and Derivatives Association standards, reducing currency risk, and preserving the Central Bank and IDB from FX exposure. The transaction also marks a development in the longstanding challenge of securing long-term foreign currency hedge coverage, both in the sustainable sector and across several areas of infrastructure.

The addition of the FX Hedging Conduit also completes the Eco Invest program’s intended structure by combining FX hedging with blended financing to mobilize private capital, liquidity tools, and a project preparation facility toward sustainable investment.

The Arnold & Porter team was led by partner Whitney Debevoise and counsel Arturo Caraballo.