The silent power of public development banks
Brazilian report reveals how public development banks expand inequalities and socio-environmental impacts
Aerial view of the Belo Monte hydroelectric dam in Altamira, Pará state, Brazil, taken on June 13, 2025. (Photo by Carlos Fabal / AFP)
Public Development Banks (PDBs), responsible for about 10% of investments worldwide each year, have contributed to the expansion of inequalities, to the indebtedness of countries, and to the increase of socio-environmental impacts – as shown by the Brazilian version of the report “Demystifying Development Financing: how Public Development Banks affect peoples and the planet”, published by Conectas.
The study gathers evidence that these institutions, created to fund public policies and promote “sustainable development”, often reinforce the concentration of economic power, weaken local communities and support projects connected to human rights violations.
In Brazil, the first bank of this kind, BNDE, was created in 1952, with the “S” (for Social) in its title being included only in 1982. Since then, these institutions have become cornerstones of the State investment policy – even though the mostly operate away from the eyes of the public.
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A system that claims to be sustainable, but isn’t always so
The document, collectively produced by members and allies of the Human Rights in Development Coalition, a global network of movements and civil society organizations, gathers evidence that jeopardize the official narrative of “sustainable development”.
Though PDBs use public funds and present themselves as agents in the fight against poverty and climate change, the report shows that, in practice, their investments often deepen inequalities and environmental impacts.
The main conclusions include:
Inequality and exclusion. Projects funded by PDBs tend to observe a “top-down” logic, ignoring the participation of the affected communities. The privatization of essential services, such as health and water utilities, is a recurring effect.
Indebtedness and austerity. Countries that resort to loans from these banks often face unsurmountable debt and austerity policies imposed in the name of fiscal stability.
Environmental contradictions. There are social and environmental safeguards, but they are insufficient. Many projects lead to deforestation, river contamination, and populational displacements while brandying the label of “clean energy”.
Support to controversial regimes and companies. There are cases in which banks fund authoritarian governments and corporations with a history of human rights violations, silencing communities and restricting social participation.
The Brazilian case: development at the expense of rights
The Brazilian version of the report details representative examples. Among them, the wind farms of Chapada do Araripe, funded by the New Development Bank (the BRICs Bank) and the BNDES, where quilombola and rural communities report deforestation, land loss, and health problems.
Another case mentioned is that of the Belo Monte Power Plant, in the Amazon, a symbol of the contradictions between the development discourse and the reality of socio-environmental violations. These projects illustrate what the report refers to as “false solutions” for the climate crisis, initiatives that, instead of reducing impacts, reproduce a predatory and unequal model.
The challenge of making funders accountable
When analyzing PDBs, the publication argues that their effects go way beyond visible megaprojects. They include the indebtedness of Global South countries, the weakening of environmental policies, and the erosion of social rights.
For the organizations involved, the most urgent task is to democratize the debate on development financing, ensuring transparency, social participation, and accountability mechanisms. “Public development banks shape the future of entire countries. However, if their decisions are not grounded in human rights, the cost is borne by those who can pay the least”, the document summarizes.
