Portucel Moz

active

IFC’s proposed investment is to participate in the first phase of a greenfield integrated plantation and pulp mill investment in Zambezia and Manica provinces of Mozambique, which is ongoing. Phase I is projected to cost $131 million and for which IFC would provide a $25 million equity investment. The IFC investment aims to establish 38,000 hectares (ha) of eucalypts plantations in 2014-16, as part of an initial effort to plant 60,000 ha and set the stage for a Phase-II investment. These plantation areas fall within 43 concessions, known as DUATs (direito de uso e aproveitamento da terra, or land-use rights), totaling some 356,000 ha, granted to Portucel by the Mozambican government following a public consultation process in 2009. The Portucel investment was first approved in December 2009 by the Council of Ministers under Internal Resolution No. 7/2009, and provisional DUATs were granted and officially gazetted in December 2011. The targeted planting areas are located in Zambezia and Manica Provinces. The purpose of the Project is to establish the raw material base for the pulp mill, build its capacity, and test its business model to operate in Mozambique. Successful implementation of the project could result in a full-scale integrated industrial project including the establishment of up to 250,000 ha of plantations and the construction of a one million metric ton pulp mill, a biomass power generation complex, and port terminal in one of the provinces. (These facilities will require separate ESIA and environmental permitting processes.) A decision about the precise siting of the pulp mill as well as ancillary installations is likely to be taken in 2017-2018. Any such facilities and the full-scale afforestation project fall beyond the scope of this ESRS, and IFC participation in Phase II would necessitate another E&S appraisal and demonstrated compliance with applicable laws and IFC Performance Standards.