Sunshine Paper

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The proposed investment is a US$100 million equivalent A loan to finance the Phase II expansion of Shandong Kemai Bio-Pulping Co., Ltd. (“SKBP” or the “Company”), which is the wholly owned subsidiary of Shandong Century Sunshine Paper Group Company Limited (“SCSPG” or the “Guarantor”). The company has already constructed a Phase 1 of a bio-mechanical pulp facility with 200,000 metric tons (MT) annual capacity in early 2021. SKBP is now planning a Phase 2 expansion with additional 300,000 MT capacity. The facility is located in Changle Economic Development Zone, Weifang City, Shandong Province, China.  Bio-pulping facility workflow include weighting, aspiration from receiving trucks, cleaning, steaming, alkali maceration, biological reaction with enzymes, slurry extraction, and washing. SKBP is using wheat straws procured from local farmers as its raw material inputs.  Safety system to ensure worker’s safe working conditions (e.g., dust and noise exposure, fire and dust explosion prevention/warning and firefighting system) are in place. Removal of the incinerator (originally used for water treatment) is ongoing, which will no longer generate SO2 and NOx emissions. The wheat cultivation is dominated by smallholder growers, defined to have up to 10 hectares. Wheat cultivation, including planting, chemical application and harvesting, is highly mechanized with technical and mechanical support from small to medium enterprises (SMEs) or Cooperatives. The wheat farming is normally conducted once a year, with harvesting taking place in June.