IFC, Partners Back $2.2B Pulp Project in Brazil to Drive Green Industrial Growth

The International Finance Corporation (IFC), a member of the World Bank Group, has joined forces with IDB Invest, Finnvera, and a consortium of leading global banks to support the development of the Sucuriú Project in Mato Grosso do Sul, Brazil. The project, spearheaded by Chile-based forestry and paper company Arauco, is being hailed as a game-changer for the global pulp industry—setting new benchmarks in efficiency, sustainability, and environmental performance.

A Landmark Financing Package

The total financing package amounts to $2.2 billion, reflecting the scale and ambition of the project. It includes:

• $1.25 billion loan, co-led by IFC and IDB Invest, with contributions from eight international banks.

• $970 million in Export Credit Agency (ECA) financing, guaranteed by Finnvera, Finland’s official export credit agency.

• J.P. Morgan serving as Global Coordinator for the financing structure.

This robust investment underscores investor confidence in both the resilience of Brazil’s pulp industry and Arauco’s proven track record as a global leader in sustainable forestry.

Transforming Brazil’s Pulp Sector

Brazil is already recognized as one of the world’s most competitive pulp producers, thanks to its favorable climate, fertile soils, and sustainable forestry practices. The Sucuriú Project is designed to build on this advantage, bolstering the country’s export potential and cementing its role in global markets.

The new facility will have an estimated annual capacity of 3.5 million metric tons of Bleached Hardwood Kraft Pulp (BHKP), making it one of the largest and most advanced operations of its kind. This output will be supported by around 400,000 hectares of sustainably managed eucalyptus plantations, ensuring a stable and renewable raw material supply.

Job Creation and Renewable Energy Gains

The project is expected to generate significant socioeconomic benefits in Mato Grosso do Sul:

• 14,000 temporary jobs during the construction phase.

• 6,000 permanent jobs once operations begin.

• Production of 400 MW of renewable, biomass-based energy, with 45% supplied to Brazil’s national grid, directly supporting the country’s renewable energy goals.

This dual impact—industrial growth combined with clean energy contributions—aligns closely with Brazil’s long-term sustainability agenda.

IFC’s Role: Raising Environmental and Social Standards

As part of the financing agreement, IFC has acted as environmental and social coordinator, ensuring the Sucuriú project adheres to IFC’s globally recognized Performance Standards. These commitments include:

• Strengthening land acquisition procedures to safeguard community rights.

• Enhancing stakeholder engagement and participatory planning.

• Implementing biodiversity management and monitoring frameworks.

• Ensuring responsible water and forest management practices.

By embedding these safeguards, IFC is helping Arauco elevate its sustainability practices while ensuring that development benefits are equitably shared.

A Model for Responsible Development

The Sucuriú project is more than an industrial investment; it represents a comprehensive model for shared value. Its socio-environmental plan will direct resources into vital areas such as healthcare, education, housing, and environmental conservation, ensuring long-term community resilience.

The project also emphasizes strategic partnerships with local communities, prioritizing inclusive growth and creating opportunities for social advancement alongside economic expansion.

Driving Innovation in the Global Pulp Industry

With its combination of cutting-edge technology, renewable energy integration, and community-focused development, the Sucuriú project is positioned to set a new global standard in pulp production. It demonstrates how large-scale industrial investments can be aligned with environmental stewardship, climate action, and inclusive growth.

“This strategic investment underscores IFC’s commitment to sustainable industrial development and private sector-led growth,” IFC said, adding that the project represents a significant step toward balancing economic competitiveness with social and environmental responsibility.

As Brazil continues to grow as a hub for sustainable forestry, the Sucuriú project stands as a landmark investment in green industrial development, one that may serve as a blueprint for similar projects across Latin America and beyond.