BRAZIL –   Chilean company Arauco has announced a landmark financing agreement to develop a next-generation pulp mill in Mato Grosso do Sul, Brazil, a project set to establish a new global benchmark in efficiency and environmental performance within the pulp industry.

The transaction includes a USD 2.2 billion financing package, with J.P. Morgan acting as Global Coordinator. The financing structure features a USD 1.25 billion loan co-led by IDB Invest and the IFC, involving eight additional banks, as well as USD 970 million in export credit financing guaranteed by Finnvera.

Brazil, recognized as the world’s most competitive producer of pulp, offers optimal conditions for sustainable forestry and industrial expansion. The Sucuriú Project will capitalize on this potential, driving competitiveness, exports, and sustainability in the country’s pulp sector.

The facility will feature cutting-edge technology and renewable energy generation, with an annual capacity of 3.5 million metric tons of bleached hardwood kraft pulp (BHKP). Backed by 400,000 hectares of sustainably managed eucalyptus plantations, the plant will also produce 400 MW of renewable energy, of which 45% will be sold to Brazil’s national grid, supporting the country’s clean energy goals.

Located in the municipality of Inocência, the project is expected to transform the regional economy, creating 14,000 temporary jobs during construction and 6,000 permanent positions once operational.

The participation of multilateral institutions and export credit agencies ensures compliance with international environmental and social standards and supports technical advisory services in climate, social, and supply chain areas.

Through a comprehensive Environmental and Social Strategic Plan, the project integrates biodiversity monitoring, clean energy generation, efficient water management, and responsible forestry practices, while also investing in local communities through initiatives in health, education, housing, and environmental conservation.

By aligning economic growth with environmental responsibility and social inclusion, Arauco’s Sucuriú Project represents a forward-looking model of shared value and sustainable industrial development in Latin America.