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Washington, D.C., December 9, 2004
— The International Finance Corporation, the private sector arm of the World Bank Group, signed a $50 million loan agreement with Aracruz Celulose S.A., the world's leading producer of bleached eucalyptus kraft pulp and one of the largest exporters in Brazil. IFC’s 10-year loan will support various corporate initiatives by Aracruz, including an expansion of the company’s sustainable business practices and supporting specific social and environmental investments.
During the signing ceremony, Peter Woicke, Head of IFC and Managing Director of the World Bank, noted, “This transaction fits well with IFC’s strategy for the forest products sector, which focuses our efforts on competitive projects that emphasize sustainable forestry management, eco-efficient technologies, and environmental investments. In addition, our investment will also benefit Brazil by increasing the competitiveness of a company that serves as a benchmark in its industry for efficiency and generates large export revenues.”
Carlos Aguiar, Aracruz’s Chief Executive Officer, said, “This transaction is an opportunity for IFC and Aracruz to start a business relationship that will provide the company with a stable long-term funding base”. “It will also corroborate Aracruz’s corporate governance, environmental and social practices, helping set industry standards”, he added.
Established in 1967, Aracruz operates two pulp mills in the states of Espírito Santo and Rio Grande do Sul, with a combined annual capacity of 2.4 million metric tons. Aracruz also owns 247,000 hectares of high-quality eucalyptus plantations, intermingled with 128,000 hectares of native forest reserves, which are specially maintained by the company to preserve the ecosystem balance.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
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