IDB Invest and IFC are co-leading a $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 IDB Invest and IFC 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 144 megawatts cogeneration plant. LD Celulose will also sustainably plant and manage approximately 70,000 hectares of eucalyptus plantations.
The plant will be one of the most productive and energy-efficient in the world and will supply the public grid with renewable energy from the 40 percent of excess bioelectricity generated on site. DWP is the main raw material used to produce wood-based textile fibers, a biodegradable and more environmentally friendly fiber alternative.
The $1.1 billion loan package includes: (1) a $500 million financing package arranged by IDB Invest (a $200 million loan from IDB Invest, $50 million loan through IDB Invest’s administered China Co-financing Fund, and $250 million loan syndicated to international commercial banks); (2) a $500 million financing arranged by IFC (a $200 million loan from IFC; $50 million loan through the IFC’s co-lending program; and $250 million loan syndicated to international commercial banks); and (3) a $147 million loan from financial institutions backed by the Finnish export credit agency Finnvera.
Participating banks 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.
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $12.1 billion in asset management and 333 clients in 24 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
SÃO PAULO, June 3, 2020