The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed a US$50mn loan agreement with Aracruz Celulose, 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.
Peter Woicke, head of the IFC and managing director of the World Bank, notes: “This transaction fits well with IFC’s strategy for the forest products sector, which focuses our efforts on competitive projects that emphasise 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, adds: “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.”
Established in 1967, Aracruz operates two pulp mills in the states of Esprito Santo and Rio Grande do Sul, with a combined annual capacity of 2.4mn 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.