São Paulo, January 23rd, 2025 – The International Finance Corporation (IFC), a member of the World Bank Group, is providing an up to $165 million (approximately R$ 1 billion) financing to São Martinho S.A., one of Brazil's leading producers of sugar, ethanol, and renewable energy. This investment aims to support the company's decarbonization efforts in the agribusiness sector, contributing to climate change mitigation and adaptation.
The ten-year IFC loan will support the construction of São Martinho's first biomethane plant at their Santa Cruz Unit, which will produce renewable natural gas through the biodigestion of sugarcane vinasse. Additionally, the funds will be used to renovate sugarcane fields and treat sugarcane crops at the Santa Cruz Unit, enhancing the renewable biomethane production project. This initiative will also boost biomethane production by improving sustainable agricultural productivity.
IFC will also support São Martinho`s efforts to reduce greenhouse gas (GHG) emissions and achieve its decarbonization goals, particularly for agricultural equipment, such as tractors, trucks, and irrigation pumps. Using biomethane as a fuel source for these vehicles and machinery can significantly reduce emissions and contribute to a more sustainable agricultural ecosystem. Moreover, IFC will collaborate with São Martinho by advising them on their vocational capacity building program for vulnerable populations, including women in rural settlements and underemployed youth groups, within its area of influence.
Agribusiness is a cornerstone of the Brazilian economy, representing approximately 25% of the country's GDP. The sugar and ethanol sector, which contributes to the renewable energy production through the generation of electricity from biomass and the production of sustainable biofuels, can also play a crucial role in the production of biomethane. Vinasse, a by-product of sugarcane processing, can be treated in biodigesters to generate biogas. Once filtered and purified, the biogas can be converted into biomethane and the solid and liquid by-products into biofertilizers, rich in essential nutrients.
"This new transaction strengthens our partnership with IFC and demonstrates the institution's confidence in our sustainable and competitive business model, which invests in innovation to produce clean energy from renewable carbon, promoting economic growth, preserving the environment, and contributing to the social well-being of the communities where we operate," said Felipe Vicchiato, CFO of São Martinho.
"We are pleased to strengthen our partnership with São Martinho through this third project and support their efforts to decarbonize and implement innovative technologies that promote sustainability in the agricultural sector," says Manuel Reyes-Retana, IFC's Regional Director for South America. " This new project will not only contribute to the reduction of greenhouse gas emissions but will also help stimulate sustainable and inclusive economic development in the agricultural sector, benefiting local communities and enhancing Brazil's climate resilience," he added.
Over the last ten years, IFC has invested in the sector in Brazil to support the expansion of crushing capacity, electricity cogeneration, sugarcane planting, and biogas production. "By supporting various companies in the sector, IFC has played a key role in accelerating progress towards best practices in environmental and social sustainability, demonstrating the importance of sustainability for this industry.
This investment in São Martinho aligns with the World Bank Group's strategy for Brazil over the next five years, which aims to build a more productive, inclusive, and sustainable economy by fostering productivity and competitiveness-led growth, promoting inclusive development, and unlocking Brazil's potential as a sustainable economy and a global leader in climate issues. IFC's strategic priorities in Brazil also include helping the country reconcile its economic growth with the challenges of environmental sustainability.
About São Martinho
São Martinho is considered one of the world’s best and largest producers of sugar, ethanol, and bioenergy. A reference in sustainable agro-industrial management and innovation, it plays a pioneering role in promoting the energy transition towards a circular and low-carbon economy. With an approximate crushing capacity of 27 million tons per crop year, including 24.5 million tons of sugarcane and 2.5 million tons of equivalent corn (500 thousand tons of corn), and a maximum harvesting mechanization rate of 100%, the Company is recognized for its credibility, efficiency, and excellence in its processes. São Martinho boasts a differentiated logistics platform for product distribution, high storage capacity, and proximity to important highways and railways, in addition to owning its own sugar truck-rail transshipment terminal, with access via an exclusive railway branch. A publicly held corporation since 2007, its shares trade on the Novo Mercado, the listing segment of the B3 with the highest corporate governance standards, under the ticker SMTO3. For more information, visit: www.saomartinho.com.br.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet. For more information, visit www.ifc.org.
Stay Connected with IFC on social media.
Sign up to have customizable news & updates sent to you.