IFC, a member of the World Bank Group, and IDB Invest, a member of the IDB Group, are co-leading a $1.1 billion financing to LD Celulose S.A., a joint venture between Lenzing AG and Duratex S.A., to build one of the largest dissolving wood pulp plants in the world, in Minas Gerais State, Brazil. The export credit agency Finnvera and seven commercial banks are participating in the financing.
The financing co-led by IFC and IDB Invest will support LD Celulose’s investment program for 2020-2022, which consists of the construction of a dissolving wood pulp (DWP) mill and the installation of a cogeneration plant with a capacity of 144 megawatts. As part of the project, LD Celulose will also sustainably plant and manage approximately 70,000 hectares of eucalyptus plantations.
The plant will operate among the highest productive and energy-efficient in the world and will feed the 40% of excess bioelectricity generated on site as green energy into the public grid. DWP is the main raw material used to produce wood-based textile fibers, a biodegradable and more environmentally friendly fiber alternative. Once operational in 2022, LD Celulose will have capacity to produce up to 500,000 tons of DWP per annum.
This investment will help strengthen the competitiveness of the pulp industry in Brazil and support job creation. In addition, LD Celulose’s cogeneration plant will contribute to an increase in the share of sustainable biofuels and renewable energy in the country’s energy mix, enhancing diversification and contributing to the country’s effort to mitigate climate change. The financing will also increase sustainability standards for the pulp industry and the plantation forestry sector through LD Celulose’s adoption of IFC’s Environmental and Social Performance Standards.
The Lenzing Group is a world market leader for wood-based cellulosic fibers, and Duratex is the largest producer of industrialized wood panels in the southern hemisphere. The LD Celulose joint venture, created in 2019, is owned 51% by Lenzing and 49% by Duratex.
