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RusForest secures financing for pellet plant in Russia

RusForest, a Swedish forestry company, has secured bank financing for its wood pellet plant currently under construction in Arkhangelsk, Russia.

The pellet plant, being built by engineering firm Hekotek at the site of RusForest's existing sawmill, will have an annual production capacity of up to 100,000 tonnes and allow the company to monetise its sawmill by-products by exporting wood pellets to Europe.

Total investment for the plant is estimated to be around €12 million.

RusForest has now secured financing from Russian bank CentroCredit to purchase the pellet equipment and finance construction and installation. The financing consists of two tranches. The first amounts to €4.9 million with an annual interest of 7%. The second tranche amounts to €4 million and carries an annual interest rate of 13.5%. Both tranches have a five-year maturity.

The company expects the pellet plant to be operational during the first quarter of 2014.