São Paulo, Brazil, July 20, 2023—To support the low-carbon transition in the cement industry in Brazil, IFC is investing $150 million in Votorantim Cimentos, a leading Brazilian cement-producing company. IFC's investment will help the company towards its goal to reduce greenhouse gas (GHG) emissions by fostering the use of alternative fuels.
IFC's investment, structured as a sustainability-linked loan, will help increase Votorantim Cimentos' co-processing capacity through the upgrade of its Salto de Pirapora plant, located in the state of São Paulo, allowing the plant to process a range of solid waste materials. This will propel the company's capacity to use higher levels of alternative fuels instead of fossil fuels. Currently, more than 30% of the fuels used by the Salto plant are considered alternative fuels, such as biomass, wood chips, used tires and refuse-derived fuel (RDF). The implementation of this project is expected to double the site's capacity to use alternative fuel.
The global cement industry is a major issuer of greenhouse gases, accounting for about seven percent of GHG emissions, according to the International Energy Agency (2020). Cement is the most widely used construction material, and the industry produces over four billion tons of cement per year, representing an important part of urbanization and infrastructure development in emerging countries. In response to current global climate change commitments, key manufacturers from hard-to-abate sectors are committed to reducing the carbon intensity of their processes. Votorantim Cimentos has recently announced a new 2030 commitment aligned with the Science Based Target initiative.
In addition to the investment, IFC will work with Votorantim Cimentos to help the company with its sourcing strategy of alternative fuels, contributing to its go-to-market strategy for each co-processing plant, and will assist the company in aligning its emission reduction targets with the Paris Agreement, which is set to limit global warming to well below 2 degrees Celsius.
According to Carlos Leiria Pinto, IFC Brazil Country Manager, "the cement industry is a fundamental part of the future of development and urbanization of developing countries, and therefore essential to sustainable economic growth. IFC's investment in Votorantim Cimentos represents an important stepping stone in the process of improving greener supply capacity in the cement sector, paving the way to attract more investments to further develop Brazil's infrastructure".
For Bianca Nasser, global CFO of Votorantim Cimentos, the project demonstrates the need for alignment between the finance and sustainability areas of companies, in addition to the importance of relationships with multilateral agencies. "The decarbonization agenda is one of the biggest challenges for the coming years. Being able to benefit from competitive and long-term loans through partnerships with institutions such as IFC will be essential to enable new projects," said Nasser.
IFC has been investing in Brazil's private sector since 1957 to address the country's most critical development challenges, including those of urbanization, social inclusion, competitiveness and productivity, and management of natural resources.
About Votorantim Cimentos
Votorantim Cimentos is a building materials and sustainable solutions company with over 13,000 employees. Its building materials portfolio includes not only cements, but also concretes, mortars and aggregates. The company also operates in the areas of agricultural inputs, waste management and co-processing. Votorantim Cimentos' sites are strategically located in proximity to the most important growing consumer markets in 10 countries, in addition to Brazil: Argentina, Bolivia, Canada, Luxembourg, Morocco, Spain, Tunisia, Turkey, United States and Uruguay. More information at www.votorantimcimentos.com.br
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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