Large equipment and service deliveries from Andritz to a pulp plant in Brazil with Finnvera’s guarantee
Andritz, specialized in pulp and paper industry technologies, will deliver all the relevant equipment and services to the Brazilian pulp producer Suzano S.A. for its Cerrado project in the municipality of Ribas do Rio Pardo, state of Mato Grosso do Sul, Brazil.
Finnish Export Credit Ltd has granted an USD 800 million export credit guaranteed by Finnvera to Suzano in relation to the Cerrado project. HSBC Bank plc acts as the arranging bank for the financing and as the guarantee holder.
Suzano is one of the world's leading eucalyptus pulp producers and one of Latin America's largest companies. The annual production capacity of the new Cerrado pulp plant is announced to be 2.55 million tons and it will be the world’s largest plant with a single eucalyptus pulp production line. The project will increase Suzano’s current pulp production capacity by approximately 20%. The BRL 19.3 billion (approximately USD 3.7 billion) project is one of the largest private-sector investments currently under development in Brazil.
Finnvera plays a significant role in the financing of these huge investments as whenever and wherever a new pulp plant is built, there is always a Finnish machinery supplier involved. Andritz describes its scope of supply to the Cerrado project as the most value added and resource efficient solution with leading technologies for all main process islands in the fiber production and chemical recovery. According to Andritz the order will provide a significant amount of employment in Finland. The impact in Helsinki, Kotka, Lahti, Varkaus and Savonlinna will be in total 260 man-years.
The ES-risk classification of the project is A, and it has been benchmarked against relevant IFC Performance Standards and EHS Guidelines. Where necessary, corrective measures, intended to close possible gaps within a reasonable period of time, are summarized in the Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
Information about the financing
Signing date of the Facility Agreement and the Finnvera Guarantee Agreement: 1 November 2022
Name of the Guarantee Holder: HSBC Bank plc.
Name of the Lender: Finnish Export Credit Ltd
Names of the Exporters: Andritz Oy, Andritz AG and Andritz Brasil Ltda.
Name of the Buyer and Borrower: Suzano S.A.
Export transaction/Goods: Equipment and services to the Cerrado pulp mill
Country of Export transaction: Brazil
Credit amount: USD 800 million
Credit period: 2 + 10 years
Environmental and social risk classification: A
Environmental and/or social impact information: The main risks associated with this project are (i) population influx; (ii) occupational health and safety risks; (iii) hazardous material transportation and storage; (iv) water and air emissions; (v) potential impacts on natural habitat and biodiversity; (vi) land acquisition; and (vii) labor compliance by contractors.
Conducted ES Due Diligence considered the environmental and social management process and documentation for the Project and gaps, if any, between these and IFC Performance Standards requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
International standards applied in benchmarking: IFC Performance Standards 1-6 and relevant EHS Guidelines
Contact point: [email protected]
Date of publish: 13 January 2023