Press Releases
print

IFC to Finance a Greenfield Sugar and Ethanol Plant in Brazil’s São Paulo State


In Brazil
Karina Manasseh
Phone: + (55) 11 5185-6881
Email:
kmanasseh@ifc.org


Washington D.C., March 8, 2007—IFC (the International Finance Corporation), announced today its support to the expansion of Brazil’s sugar and ethanol production by financing the construction of the Vale do Parana mill, a greenfield sugar and ethanol plant located in Suzanapolis, in the state of São Paulo. The total investment is $103 million, of which IFC will finance $35 million. This is the first limited-recourse project financing in Brazil’s sugar sector in many years.

Vale do Parana will employ cutting-edge technology to minimize environmental impact and maximize production efficiency. It is located in an area with access to competitive logistics and will use land, which is now devoted mainly to extensive cattle raising, in a productive and sustainable way.


The company is a joint venture of Unialco S.A. of Brazil, Inversiones Manuelita S.A. of Colombia, and Pantaleon Sugar Holdings of Guatemala. Vale do Parana will generate 1,000 direct jobs and will contribute significantly to the region’s economic development. Vale do Parana will mill 2 million meters of cane and produce 90,000 cubic meters of ethanol and 141,000 meters of raw sugar per year.


Atul Mehta, IFC Director for Latin America and the Caribbean, said, “This investment is important not only because it is IFC’s strategy to support Brazil’s renewable energy sector and because it is the first investment in the Brazilian sugar sector by a joint-venture of Latin American Companies. This investment is important because it reflects IFC’s support for Brazil’s ethanol sector, a world leader which produces renewable energy at costs that are competitive with petroleum-based fuels”


Jean-Paul Pinard, IFC Director for Agribusiness, said “IFC is proud to support an important South-South investment that brings together the expertise and financial strength of some of the best Latin American companies in the sugar sector.”


Walter Zancaner, Director of Vale do Parana, said, “Vale do Parana is an important step for our shareholders’ expansion into the Brazilian sugar and ethanol sector.  This sector is strategically important for any sugar company that is actively involved in the international market. The company will not only contribute to the development of a promising, yet still underdeveloped area of the state of São Paulo, but will have costs that are among the lowest in Brazil. Two of our shareholders are already IFC clients, so we were confident about IFC’s capabilities to structure an innovative financing package for a greenfield operation.”        


IFC’s participation in sugar and ethanol production in Brazil has been channeled through investments in selected companies that have competitive cost structures, are socially and environmentally responsible, and contribute positively to the economic development of their region. IFC is also supporting the expansion of sugar and ethanol production in other Latin American countries through investments in projects with competitive costs and significant economic development impact for the country.          


About IFC

IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries.  IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org.

During the last fiscal year, Brazil received the largest amount of IFC financing, in dollar value, among Latin American countries. IFC invested $737million, including $258 million in syndicated loans, in sectors ranging from agribusiness and transportation to manufacturing and the financial sector. IFC’s total portfolio committed in Brazil was $1.5 billion at June 2006.


Inversiones Manuelita
is the second-largest Colombian-based sugar producing group.  It has mills in Colombia and Perú and over 140 years of experience in sugarcane production.  In addition to its sugar operations, Manuelita has interests in palm oil processing and shrimp production. Last year Manuelita produced more than 400,000 meters of sugar and 50,000 cubic meters of ethanol.


Pantaleon Sugar Holdings,
established more than 100 years ago in Guatemala, is the leading sugar producing group in Central America.  It has mills in Guatemala and Nicaragua and also plays an important role in the energy markets in those countries, generating 100 megawatts of renewable electricity using bagasse for sale to the local grids. This year Pantaleon will produce more than 750,000 meters of sugar and 20,000 cubic meters of ethanol, primarily for the international market.


Unialco S.A. Alcool e Açucar
is a Brazilian sugar and ethanol producer based in Guararapes, Sao Paulo. Founded in 1980, Unialco has since expanded through continuous investments and acquisitions and now operates two mills with a total sugarcane crushing capacity of nearly 4.2 million meters per year. Last year Unialco produced  more than 280,000 meters of sugar for the export market and 140,000 cubic meters of ethanol for the domestic market.