Melhoramentos VP

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The proposed IFC investment is a loan of up to US$50 million to Companhia Melhoramentos Norte do Parana (the “Company” or “CMNP”), a Brazilian sugar and ethanol company (http://www.cmnp.com.br/). In 2022, CMNP acquired the Vale do Parana mill (“VPM” or “the Project’’), which has raw sugar, ethanol and cogeneration production capacity. The loan will support CMNP’s investment program for the next two years for sugarcane renewal and treatment, that will result in more efficient land use and optimize VPM´s crushing capacity. VPM’s CAPEX program will use climate smart and more efficient agricultural techniques including (i) optimized sugarcane mix to increase plague resistance, (ii) use of organic fertilizers and biological pest control combined with traditional agri inputs, (iii) precision fertirrigation, and (vi) satellite images analysis to support these activities. The sugar cane harvested area will increase from 17,000 hectares (ha) in FY22/23 to an expected 28,300 ha in FY24/25. Eighty percent of harvested area are leased properties, and the remainder are from third-party suppliers. In addition to the sugar cane plantations, VPM has a mill and a bio-gas generation plant in owned land, and a transmission line that crosses both owned and leased land. VPM is located in Suzanápolis, Western region of the State of Sao Paulo, in consolidated agricultural areas as the mill was commissioned in 2008. This would be IFC’s first investment in Companhia Melhoramentos Norte do Parana. Nevertheless, IFC was a lender for the construction of the VPM mill in 2007 (https://disclosures.ifc.org/project-detail/ESRS/25008/vale-do-parana-sa). The VPM mill was commissioned in 2008.