Arauco Secures $2.2 Billion Funding for Sucuriú Project

Chilean company Arauco has secured a financing agreement totalling $2.2 billion to develop a state-of-the-art pulp mill in Mato Grosso do Sul, Brazil. The project is expected to set a new benchmark for efficiency and environmental performance in the global pulp industry.

The transaction, with JP Morgan acting as global coordinator, includes a $1.25 billion loan co-led by IDB Invest and the IFC, with the participation of eight additional banks, as well as $970 million in Export Credit Agency financing guaranteed by Finnvera.

Brazil, recognised as the most competitive country in pulp production, offers fertile ground for sustainable forestry growth and industrial development. The Sucuriú Project, the world’s largest single-phase pulp mill project, will harness this potential, boosting competitiveness and sustainability in the country’s pulp sector.

The project will integrate cutting-edge technologies and sustainable practices and address key development challenges by strengthening industrial productivity, boosting exports, and promoting regenerative materials and renewable energy.

It will employ cutting-edge technology and integrate renewable energy generation to develop a state-of-the-art pulp mill with an annual capacity of 3.5 million metric tons of bleached hardwood kraft pulp. This operation will be supported by 400,000 hectares of eucalyptus managed under sustainable practices and biomass-based energy generation.

The project will contribute to the development and growth of exports in the state of Mato Grosso do Sul, particularly in the municipality of Inocência, where a large-scale economic transformation is expected.

It is estimated that approximately 14,000 temporary jobs will be created during the construction phase and 6,000 permanent jobs during operation, in addition to generating 400 MW of renewable energy.

Of the total generated, 45% will be sold to Brazil’s national electricity grid, thus contributing to the country’s renewable energy goals.

The participation of multilateral institutions and export credit agencies ensures compliance with international environmental and social standards, fosters stakeholder engagement, and supports technical advisory services in climate, social, and value chain areas.

Through this strategic investment, the lenders reinforce their commitment to sustainable industrial development and private-sector-led growth in Brazil.

The Sucuriú Project integrates sustainable practices such as biodiversity monitoring, clean energy generation, strategic and efficient water management, and responsible forest management, while actively engaging local communities through participatory planning and strategic partnerships.

Its Socio-Environmental Strategic Plan channels resources toward essential areas such as health, education, housing, and environmental conservation, ensuring long-term prosperity and a better quality of life for the people of Mato Grosso do Sul.

By aligning economic growth with environmental responsibility and social inclusion, Sucuriú exemplifies a shared value model that embraces the future with responsibility.

Expansion on Cards for Sometime

Iván Chamorro, Senior Vice-President Forestry & Woodpulp Business for the Arauco Group, said that his company was looking into expanding pulp production in Brazil for years.

“Our target was to enhance our competitive position, and Brazil has the required conditions, including logistics infrastructure, skilled people, and the right environment for trees to grow. We selected Mato Grosso do Sul state and the city of Inocencia as the location for our project,” he explained.