IFC invests in CerradinhoBio to help boost biofuels and biomass production in Brazil
IFC, a member of the World Bank Group, will provide BRL 150 million (€41m) of long-term financing to CerradinhoBio, an ethanol and biomass-based electricity producer operating in the state of Goias, in Brazil.
This investment will support the growth of the sugar and ethanol industry and help to further develop renewable energy production in the country.
Brazil is the world’s largest sugar cane producer and exporter, and the second largest ethanol producer. The sugar and ethanol industry is key for economic development and job creation in Brazil, employing around one million people and accounting for 9.8% of the agribusiness exports.
IFC’s ten-year investment in CerradinhoBio will help the company to increase its production of bioethanol used as renewable fuel by 28%, and more than double its generation capacity of bagasse-based electricity to be used for its own energy supply, with the excess being exported to the national electric grid.
That will contribute to the reduction of GHG emissions by around 280,000 tons of CO2 equivalent per year, and help to further develop the Goias region, whose economy relies substantially on agribusiness.
"We welcome IFC’s support to our expansion plan,” said Paulo Motta, CEO of CerradinhoBio. “This financing will allow us to continue to develop our business and enhance our sustainability standards, but it is also important to help demonstrating IFC’s confidence in a sector that is of great importance for Brazil’s economic growth.”
“Agribusiness is a strategic priority for IFC because of its potential for development and poverty reduction,” said Luiz Daniel de Campos, Principal Investment Officer, Agribusiness Department, IFC Brazil. “We are pleased that our support to CerradinhoBio will also help enhance sustainability standards in the industry as well as support the growth of renewable energy initiatives in Brazil.”
IFC promotes inclusive economic development in agribusiness by financing its complete value chain.
In fiscal year 2016, IFC invested globally $3.4 billion in the entire agribusiness production chain in order to help increase production liquidity, improve logistics, and expand access to credit for small farmers. In that same fiscal year, IFC’s global portfolio in agribusiness totalled $4.9 billion. In the past four years, IFC invested $620 million in the agribusiness and food sectors in Brazil alone.
This story was written by Liz Gyekye, editor of Biofuels International and Bioenergy Insight.