Arauco Sucuriu

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The proposed IFC investment aims to support Celulosa Arauco y Constitución S.A. (“Arauco” or the “Company”) in the construction and operation of a greenfield pulp mill in the state of Mato Grosso do Sul, Brazil (the “Sucuriú” or the “Project”). The site is located approximately 50 km from the city of Inocência (MS), on the left bank of the Sucuriú River. The Project's total investment is US$ 4.6 billion. IFC is considering a financing package of up to US$250 m A Loan and at least US$250 m B Loan. The Project is comprised of a new eucalyptus bleached pulp mill with an annual production capacity of 3.5 million tons; and (ii) a eucalyptus plantation base covering a net area of 400,000 hectares. The Project Associated facilities include (i) a 47-km rail connection; (ii) a 90-km, 230 kV transmission line (T-Line) and substation; and (ii) a new terminal within the Port of Santos (currently in the planning phase). As part of the Project, Arauco will also construct and operate workers’ accommodation facilities to accommodate up to 5,340 workers. Earthworks and paving jobs for the construction of the pulp mill began in June 2024, with plant startup expected in the third quarter of 2027. The pulp mill is being built under an Engineering, Procurement, and Construction (EPC) contract, covering earthworks, civil works, and foundations. Valmet will oversee the main process areas, and AFRY will manage key Balance of Plant (BOP) components. Valmet will be also the main process technology suppler for the pulp mill, which will include six woodyard chipping lines, two complete bleached fiber lines, three pulp drying lines, evaporation systems, a recovery boiler, a biomass boiler, and a white liquor plant. The facility will be energy-sufficient, generating 400 MW of electricity, with 220 MW available for sale to the power grid. The 230 kV T-Line will connect to the Ilha Solteira 2 substation. The railway branch connecting the plant to the Rumo Malha Norte (RMN) line runs parallel to the southern side of the MS-377 highway, sharing the same right-of-way (ROW). A balloon loop (rail wye) will be constructed within the plant site to accommodate both an empty and a loaded train simultaneously, ending at the connection point with RMN’s railway. The construction of the T-Line, power substation, railway branch, and port terminal have not yet started. The Project will require a planned net eucalyptus plantation area of 400,000 hectares and has already secured a gross landholding of 237,000 hectares, including 115,000 hectares of net plantations. As of now, approximately 61,000 hectares of the Sucuriú forest land base are certified under the Forest Stewardship Council (FSC), with a plan to achieve full FSC Forest Management (FM) certification. The afforestation plan envisions planting 65,000 hectares annually between 2025 and 2031.