OREANDA-NEWS. The Inter-American Development Bank (IDB) has joined efforts with Klabin S.A. to finance the construction of a new state-of-the-art greenfield pulp production mill in the municipality of Ortigueira, one of the poorest cities of the state of Parana, Brazil. Through an A/B Loan of $300 million, the IDB Group has provided Klabin with long-term financing to develop Project Puma—the largest private investment in the history of Parana.

Puma will have a significant development impact in neighboring communities and make Klabin one of the largest employers in the region. The project will create approximately 8,500 jobs during the construction phase and 1,400 once it becomes operational.

The new mill will be self-sufficient in electricity, thanks to a 255 MW biomass facility that will sell 56 percent of its energy surplus to the national grid. It will have one of the lowest pulp production costs in the world and an installed production capacity of 1.42 million tons of pulp per year. Puma will also strengthen local infrastructure through investments in railways, road networks and port facilities.

As a result of the collaboration between the IDB Group’s public and private sector arms, the municipality of Ortigueira will also receive resources and expertise to strengthen its institutional capacity and manage the increase in tax revenues and economic activity resulting from the project. The IDB Group has also mobilized $500,000 from the Global Environmental Fund (GEF) to support Klabin in the construction of wildlife-friendly corridors within the project site, as part of a globally significant biodiversity hotspot called Mata Atlantica.

The $150-million B-loan mobilized by the IDB Group has a 7-year tenor—a longer term than that which is usually available in the local commercial banking market. The participating banks are HSBC, Sumitomo Mitsui Banking Corporation (SMBC), and Bank of Tokyo-Mitsubishi UFJ (BTMU). The first portion of the loan, $200 million, was disbursed last week.

About us

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

About the IIC, member of the IDB Group

In January 2016, the IDB Group consolidated its private sector work into the Inter-American Investment Corporation (IIC). The IIC seeks to finance sustainable businesses and state-owned enterprises to achieve financial results that maximize social and environmental development for the region. With a current portfolio of $7 billion and over 400 projects in 21 countries, the IIC works across sectors to provide financing solutions and advisory that meet the evolving demands of the region’s private sector.

About Klabin S.A.

Klabin, an investment grade company, is the largest integrated manufacturer of packaging paper in Brazil, and the country’s market leader in paperboard, corrugated boxes and industrial sacks. With 15 industrial plants in Brazil and one in Argentina, the company sells approximately 75 percent of its products domestically and exports the remainder to 70 countries around the world. Its paper and paperboard products are used by companies and consumers in a wide range of sectors including packaging for food and beverages, consumer goods and building and construction materials.