IFC, IDB Invest, Finnvera partner in landmark financing to Arauco to boost sustainable pulp production in Brazil

São Paulo, Brazil, August 25, 2025 - IFC, a member of the Word Bank Group, together with IDB Invest, Finnvera and a consortium of international banks, is supporting the development of the Sucuriú project, a state-of-the-art pulp production facility in Mato Grosso do Sul, Brazil, led by Chile-based Arauco. This transformative project is set to establish new standards for efficiency and environmental performance in the global pulp industry.

The financing package of $2.2 billion includes a $1.25 billion loan co-led by IDB Invest and IFC, with participation from eight banks, and $970 million in Export Credit Agency (ECA) financing guaranteed by Finnvera. J.P. Morgan acted as Global Coordinator.

The Sucuriú project will leverage advanced technologies and sustainable practices to address some of the critical development challenges  in Latin America, including strengthening industrial productivity, boosting exports, and promoting regenerative materials and renewable energy. Brazil, recognized as a global leader in competitive pulp production, provides an ideal environment for sustainable forestry and industrial growth. The Sucuriú project will harness this potential, driving competitiveness and sustainability in Brazil’s pulp sector.

The facility will feature an estimated annual capacity of 3.5 million metric tons of Bleached Hardwood Kraft Pulp, supported by approximately 400,000 hectares of sustainably managed eucalyptus plantations and biomass-based energy. The project is expected to contribute significantly to the development and export growth of Mato Grosso do Sul, creating approximately 14,000 temporary jobs during construction and 6,000 permanent jobs during operations, while producing 400 MW of renewable energy—45% of which will be supplied to Brazil’s national grid, supporting the country’s renewable energy objectives.

This strategic investment underscores IFC’s commitment to sustainable industrial development and private sector-led growth. IFC acted as environmental and social coordinator in the financing package,  supporting Arauco in strengthening its practices in line with IFC’s Performance Standards. This includes enhancing the project’s land acquisition procedures, stakeholder engagement, and biodiversity management.

The Sucuriú project incorporates sustainable practices such as biodiversity monitoring, clean energy generation, efficient water management, and responsible forest management. It actively engages local communities through participatory planning and strategic partnerships. The socio-environmental plan will direct resources to essential areas including health, education, housing, and environmental conservation, fostering long-term prosperity and improved quality of life for the people of Mato Grosso do Sul. By aligning economic growth with environmental stewardship and social inclusion, the Sucuriú project exemplifies a model of shared value and responsible development.

About Arauco

ARAUCO is a global company with more than 50 years of experience in producing and managing renewable forest resources. Through their integral use, we participate in businesses such as pulp, wood, panels, and energy, with industrial operations and commercial offices in more than 33 countries. With forest and industrial presence in Chile, Argentina, Brazil, Uruguay, Mexico, the United States, Canada, Europe, and South Africa, the company develops products that are part of diverse industries such as paper, construction, packaging, furniture, apparel, retail, and energy, reaching customers in the world’s main markets.

Our management is founded on the renewable bioeconomy, where wood is the central raw material for designing sustainable products that provide competitive advantages across different industries. ARAUCO manages 1.7 million hectares of forest assets dedicated both to sustainable production and to the conservation and restoration of ecosystems. The company has been carbon neutral since 2020 and operates under a business model that combines innovation, resilience, and the creation of shared value with employees, communities, customers, and investors. With a long-term vision, the responsible management of its plantations and forests, together with the production of renewable products, stands at the core of its sustainability model. For more information, please visit www.arauco.com.

About Finnvera

Finnvera strengthens the operating potential and competitiveness of Finnish enterprises by offering loans, guarantees, export credit guarantees, and other services associated with the financing of exports. Finnvera is a specialized financing company owned by the State of Finland and the Export Credit Agency (ECA) of Finland. Finnvera is one of the key organizations in Team Finland network that accelerates business internationalization and growth. At the end of March (Q1/2025), Finnvera’s exposure for export credit guarantees, export guarantees and special guarantees amounted to EUR 22.9 billion. For more information, visit www.finnvera.fi/eng.

About IDB Invest

IDB Invest 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 US$22 billion in assets under management and more than 440 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet its clients' needs across various sectors. Visit our website: idbinvest.org/en.