São Paulo, Brazil, December 23, 2022—IFC is partnering with Suzano S.A., a leading integrated forestry, pulp and paper company in Brazil, to boost sustainable development of the country's pulp industry, strengthen its competitiveness, create jobs, and support the country's efforts towards climate change mitigation.
IFC's $600 million loan is structured as a sustainability-linked loan, which includes financial incentives connected to targets on climate (GHG emission intensity reduction) and gender (increased percentage of women in leadership positions). The loan, which supports Suzano's Cerrado Project, consists of $250 million from IFC's own-account and $350 million mobilized with several financial institutions.
The proceeds of the loan will be used for the construction of a greenfield pulp mill and development of eucalyptus plantations in Ribas do Rio Pardo, state of Mato Grosso do Sul. The loan will support climate change mitigation by investing in sustainably-managed plantations that will sequester carbon and by increasing the use of renewable energy sources through the export of 180 megawatts to the power grid. Once operational, the new plant will create around 3,000 indirect and direct jobs, boosting the social and economic development in a region in which 28% of people live below the poverty line.
"We are excited to partner with Suzano in this project and support them in the implementation of their ambitious sustainability goals," said Carlos Leiria Pinto, IFC Brazil Country Manager. "The forest value chain is central to the transition to a low-carbon and circular economy rooted in renewable and natural resources. While the sector has the potential to foster development of rural economies and contribute to the climate solution, it is critical that all investments are well planned and operations carefully managed in order to mitigate potential social and environmental risks. That is why IFC selects very carefully its engagements in the sector," he added.
Under the Paris Agreement, Brazil has committed to a 43 percent reduction in GHG emissions between 2005 and 2030. This goal is expected to be mainly achieved by increasing the share of sustainable biofuels and clean energy in its energy mix and through forest restoration and reafforestation, among other measures. Sustainable investments in the forestry sector help support the country's path to GHG emission reduction and economic growth.
About IFC
IFC—a 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 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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