São Paulo, Brazil, November 4, 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 IFC’s 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 IFC’s 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, Crédit 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, Paraná 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.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
About Klabin
With a nominal production capacity of 3.5 million tons a year of pulp and paper and gross revenues of R$ 11.5 billion in 2018, Klabin is the largest producer, recycler and exporter of packaging paper in Brazil and the market leader in industrial bags and corrugated packaging. In addition, it is the only company in the country to offer the market a solution in short fiber, long fiber and fluff pulp.
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank Group (IDB), 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 assets under management and 329 clients in 21 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
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