Publish Date : 07-Nov-2019
IFC, a member of the World Bank Group, committed a US$ 280 million investment for the Puma II project run by Klabin S.A., Brazil's largest producer, exporter and recycler of packaging paper and one of the largest producers of paper in Latin America. IFC's financing will support the growth as well as the improvement in competitiveness and social-environmental standards of the Brazilian pulp and paper sector, in addition to promoting job creation.
IFC's financing package comprises three parts: a ten-year US$ 103 million loan of IFCs own resources; a seven-year US$ 127 million syndicated loan from eight commercial banks, and a US$ 50 million ten-year loan through the IFC Managed Co-Lending Portfolio Program (MCPP), a platform that allows institutional investors the opportunity to passively participate in IFCs future loan portfolio.
IFC financing is part of an overall US$ 800 million investment, which also includes: (i) US$ 180 million from IDB Invest, (ii) US$ 72 million from an international agency (which will be effective in the coming months), (iii) US$ 45 million from the China Co-financing Fund, and (iv) US$ 350 million from the following commercial banks: Santander, Rabobank, HSBC, Sumitomo Mitsui Banking Corporation, Crdit Agricole, BNP Paribas, Sumitomo Mitsui Trust Bank and KEB Hana. IFC and IDB Invest are the lenders of record for the portion coming from commercial banks.
The Puma II Project comprises the construction of two new kraftliner packaging paper machines with integrated pulp production, which will increase Klabin's paper production capacity by 920,000 tons per year. The project, which estimated cost is of BRL 9.1 billion, will be built in the city of Ortigueira, Paran State, Brazil, where Klabin currently operates the Puma I Unit, market pulp mill. In 2014, IFC participated in the financing of the Puma IUnit.
The project aims to increase Brazil's industrial production and efficiency, promote global and regional trade through export growth, expand and streamline the pulp and paper industry value chain, create jobs, increase renewable energy generation, and promote the improvement of the social and environmental practices in the sector in Brazil.
The pulp and paper industry accounts for a significant part of the Brazilian economy. Present in about 1,000 municipalities, the sector generates revenues that represent approximately 6% of the industrial GDP and 4% of Brazil's total exports.
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