Project detail - Usinas Itamarati S.A.

Who is our prospective customer?

Usinas Itamarati S.A. (“UISA”) is a biorefinery and sugarcane producer and processor that operates a sugar mill in Mato Grosso state, Brazil. UISA cultivates sugarcane and produces sugar and ethanol. It also cogenerates energy from the bagasse and makes yeast and animal feed from other by-products. It has more than 40 years of history and operates strongly in the Midwest and North regions of Brazil.

What is our funding objective?

FMO plans to participate with USD 27.5mln in a DEG syndicated term facility with an 8-year tenor. The funds will be used to finance UISA’s expansion plan, including the expansion of industrial crushing capacity, improvement of industrial productivity as well as expansion of sugar cane cultivation capacity, and further financing for the construction of a biogas plant.

Why do we want to fund this investment?

FMO intends to support with long-term financing UISA’s revenue diversification strategy by investing in the sustainable production of biogas and further expansion of a competitive sugar and ethanol player in Brazil. The Impact will be achieved by their commitment to sustainable production, social engagement and the aim to reach Net Zero CO2 eq in 2035. UISA’s own sugarcane is 100% certified on by Bonsucro. The investment is expected to be labelled 100% Green.

What is the Environmental and Social categorization rationale?

This concerns an E&S risk category A investment based on legacy issues and both the biogas expansion and the sugarcane supply chain, which will come with potentially adverse environmental or social impacts that extend site boundaries and might, in part, be irreversible, although they can be prevented and addressed through relevant mitigation measures. Furthermore, current assets, and UISA’s own sugarcane production and processing operations, show exposure to IFC Performance Standards (PS): PS1: Assessment and Management of Environmental and Social Risks and Impacts, PS2: Labor and Working Conditions, PS3: Resource Efficiency and Pollution Prevention, PS4: Community Health, Safety, and Security, PS5 (Land Acquisition and Involuntary Resettlement), PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) for risks associated to sugar farming and PS7 (Indigenous People). Note that all investments will be managed in accordance with the IFC PSs, and an Environmental & Social Action Plan will be part of the agreement.