Aperam Brazil

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The proposed IFC investment is a €250 million sustainability linked loan (SLL) to Aperam SA (Aperam), a global stainless-steel producer operating in Brazil, Belgium, and France. Aperam finances the expansion of Aperam BioEnergia (“BioEnergia” or the “Company”), its Brazilian subsidiary that produces and supplies charcoal to the Company’s blast furnaces for pig iron production. BioEnergia owns about 124,000 hectares (ha) in the Alto Jequitinhonha, Minas Gerais; 66% are Forest Stewardship Council (FSC)-certified eucalyptus plantations while the remainder is covered by native vegetation and infrastructure. BioEnergia currently produces 427,200 tons of charcoal annually, with plans to expand to 539,000 tons/year by 2033. In 2023, the company sourced 30,000 m3 of traceable wood from third parties for charcoal production. More than 30 communities live within the area of influence of BioEnergia's existing forestry operations, including four (4) Quilombola communities. These communities are included in the Aperam Acesita Foundation's stakeholder engagement and corporate social responsibility (CSR) programs. The use of proceeds will finance (i) the acquisition of 42,600 ha of land (including two properties, Jogil (approximately 27,700 ha) and SADA (approximately 1,900 ha), totaling 29,600 hectares already acquired and around 13,000 hectares yet to be acquired), (ii) the expansion of charcoal production capacity at existing charcoal-making units (CMU), (iii) the improvements in kiln efficiency and gas burner enhancements; (iv) the establishment of a bio-oil business line utilizing by-products from charcoal production; and (v) the expansion of seedling nursery capacity to meet the increasing demand for superior clonal seedlings from other forestry companies. Regarding the 29,600 ha of land already acquired, approximately one-third consists of established plantations. The remainder includes Legal Reserves (LR), Permanent Protected Areas (APP), and 5,000 ha inactive lands under natural regeneration. The location of the additional 13,000 ha to be acquired was not defined by the company yet at the time of appraisal.