São Paulo, Brazil, June 1st, 2020
- IFC, a member of the World Bank Group, and IDB Invest, a member of
the IDB Group, are co-leading a US$1.1 billion financing to LD Celulose
S.A., a joint venture between Lenzing AG and Duratex S.A., to build one
of the largest dissolving wood pulp plants in the world, in Minas Gerais
State, Brazil. The export credit agency Finnvera and seven commercial banks
are participating in the financing. The investment will strengthen the
competitiveness of Brazil’s pulp industry, create jobs, and support the
country’s efforts towards climate change mitigation.
The financing co-led by IFC and IDB Invest will support LD Celulose’s
investment program for 2020-2022, which consists of the construction of
a dissolving wood pulp (DWP) mill and the installation of a cogeneration
plant with a capacity of 144 megawatts. As part of the project, LD Celulose
will also sustainably plant and manage approximately 70,000 hectares of
eucalyptus plantations. The plant will operate among the highest productive
and energy-efficient in the world and will feed the 40 percent of excess
bioelectricity generated on site as green energy into the public grid.
DWP is the main raw material used to produce wood-based textile fibers,
a biodegradable and more environmentally friendly fiber alternative. The
end-products of DWP include textiles and hygiene products, among others.
Once operational in 2022, LD Celulose will have capacity to produce up
to 500,000 tons of DWP per annum.
Brazil is one of the most competitive pulp producing countries in the world,
due mainly to its availability of high-quality land, favorable soil and
climatic conditions, and high forest productivity. The forestry sector
plays an important economic and developmental role in the country, employing
about 350,000 people, mainly in rural areas, and accounting for 4.2 percent
of the country’s exports.
This investment will help strengthen the competitiveness of the pulp industry
in Brazil and support job creation. In addition, LD Celulose’s cogeneration
plant will contribute to an increase in the share of sustainable biofuels
and renewable energy in the country’s energy mix, enhancing diversification
and contributing to the country’s effort to mitigate climate change. The
financing will also increase sustainability standards for the pulp industry
and the plantation forestry sector through LD Celulose’s adoption of IFC’s
Environmental and Social Performance Standards.
“IFC is excited to support this important project that will help improve
Brazil´s competitiveness, create new jobs, contribute to climate change
mitigation and also increase sustainability standards for the pulp industry
and the plantation forestry sector,” said Carlos Leiria Pinto, IFC
Brazil Country Manager. “In addition to supporting our clients with
the economic impacts of the pandemic, IFC continues to help develop projects
that create a pipeline of robust investments that can accelerate Brazil´s
recovery process”, he added.
The US$1.1 billion loan package is comprised of three parts: (i) a US$500
million financing package arranged by IFC; (ii) a US$500 million financing
arranged by IDB Invest; and (iii) a US$147 million, 13-year door-to-door
loan from financial institutions backed by the Finnish export credit agency
The IFC arranged financing includes: (i) a US$200 million, 11-year loan
for IFC’s own account; (ii) a US$50 million, 11-year loan through the
IFC Managed Co-Lending Portfolio Program (MCPP), a platform that allows
institutional investors to participate in IFC’s loan portfolio; and (iii)
a US$250 million, 9-year loan syndicated to international commercial banks.
Similarly, the facility arranged by IDB Invest includes: (i) a US$200 million,
11-year loan for IDB Invest’s own account; (ii) a US$50 million, 11-year
loan through IDB Invest’s administered China Co-financing Fund for Latin
America and the Caribbean; and (iii) a US$250 million 9-year loan syndicated
to international commercial banks. Participating banks in the combined
US$500 million syndicated portion jointly arranged by IFC and IDB Invest
are: Banco Santander, BNP Paribas, Commerzbank Aktiengesellschaft (Filiale
Luxemburg), Erste Group Bank AG, HSBC Bank plc, KfW IPEX-Bank GmbH, and
Raiffeisen Bank International AG.
With this investment in LD Celulose, IFC’s global committed portoflio
in the pulp, paper and forest products sector totals more than US$1.4 billion,
including mobilization, in over 27 projects. Of this, over US$800 million
is invested in Latin America.
IFC has been investing in Brazil’s private sector since 1957, addressing
the country’s most critical development challenges, including those of
urbanization, social inclusion, healthcare, educational services, competitiveness
and productivity, and management of natural resources.
The Lenzing Group is a world market leader for wood-based cellulosic fibers,
and Duratex is the largest producer of industrialized wood panels in the
southern hemisphere. The LD Celulose joint venture, created in 2019,
is owned 51 percent by Lenzing and 49 percent by Duratex.
About LD Celulose
LD Celulose S.A. is a joint venture between the Austrian Lenzing and the
Brazilian Duratex, formed to set up one of the largest soluble cellulose
plants in the world. With an investment of R$ 5.2 billion, the plant is
being erected in the Triângulo Mineiro, between the municipalities of Indianópolis
and Araguari and, when operational in 2022, it will produce 500 thousand
tons of soluble cellulose per year. The special cellulose fibers produced
in LD will be used in the textile industry, generating fabrics with innovation,
sustainability and high technology. When the plant starts operating, it
will generate around 1,100 direct jobs, boosting the social and economic
development of the entire region
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work in more than 100 countries, using our
capital, expertise, and influence to create markets and opportunities in
developing countries. In fiscal year 2019, we invested more than $19 billion
in private companies and financial institutions in developing countries,
leveraging the power of the private sector to end extreme poverty and boost
shared prosperity. For more information, visit www.ifc.org.