IFC, a member of the World Bank Group, is investing in Companhia Melhoramentos Norte do Parana, a sugar, ethanol, and bioenergy company, to strengthen the clean and renewable energy market in Brazil. The project will promote sustainable land management and help amplify green investments, contributing to Brazil's sustainability goals.
IFC's BRL250 million loan to Melhoramentos will promote crop treatment and renovation of the company's sugarcane plantation with innovative and climate-smart agricultural practices to mitigate climate risks. In addition, the investment will support increased land productivity and increased capacity utilization at Melhoramentos' Vale do Paraná mill.
In complement to providing a long-term loan in local currency, IFC will contribute to strengthening Melhoramentos' environmental and social practices by adopting IFC's Performance Standards, including the development of an integrated environmental and social management system.
Brazil is the second-largest ethanol producer globally, accounting for 26 percent of total production in 2022, and is one of the most efficient producers of sugar and ethanol (S&E), based on the availability of arable land and favorable soil and climatic conditions. The S&E sector is key to help Brazil achieve its climate targets as it plays a leading role in both the generation of biomass-based electricity and the production of sustainable biofuels, thus helping clean and diversify the country's energy matrix.
"Since the early steps in the 1920s, beyond entrepreneurship, our journey has been marked by the courage to change, the boldness to innovate, and the dedication to build a better, more sustainable, and fairer future. Ethics and sustainability have always been one of the fundamental pillars for us. We have found in IFC a great partner to continue on this path," said Gastão Mesquita, President-Director of Companhia Melhoramentos Norte do Paraná.
"IFC's investment in Melhoramentos will contribute to increase renewable energy production and sustainable biofuel sales in Brazil. This is essential to support climate mitigation and help align private investments with Brazil's adaptation and resilience goals," said Manuel Reyes-Retana, IFC's Regional Director for South America "We expect that this project contributes to increase the use of renewable energy and highlight the need for complementary energy sources to strengthen the country's energy security", he adds.
IFC has been a longstanding partner of many Brazilian S&E producers and has played a crucial role in helping competitive players cope with the macroeconomic challenges that affect their businesses. IFC has been investing to support the sector's crushing capacity expansion, electricity cogeneration, sugar cane planting, and biogas production. In addition, the institution supports several companies in accelerating the sector's progress in reaching environmental and social best practices and showcasing the importance of sustainability for the industry.
