The International Finance Corporation, part of the World Bank Group, has agreed to commit as much as $165 million to invest in one of Brazil’s most important producers of sugar, ethanol, and renewable energy, São Martinho S.A. The funding will be focused on the aggressive decarbonization strategy both to address climate change and to keep agriculture sustainable.
Biomethane Production and Sustainable Agriculture Financing
The IFC is offering a ten year loan that will finance the first biomethane plant operated by São Martinho in its Santa Cruz Unit. The sugar and ethanol sector is crucial in Brazil’s decarbonization efforts since it produces renewable energy and biofuels from biomass. Biodigesters are used to create biomethane from vinasse, which serves as a clean source of power to replace fossil fuels. Biomethane production will increase with improved crop yields.
Biomethane, made from agricultural waste vinasse, will serve as a clean fuel that can be used in vehicles or machinery to increase the reduction of greenhouse gases in Brazil. The IFC-São Martinho partnership lowers environmental impact by using biomethane in tractors, trucks, and irrigation pumps for sustainability.
A Focus on Sustainability and Economic Development
IFC will also help São Martinho design vocational training programs for poor women and underemployed youth. This will contribute to the generation of jobs and increased social resilience of communities around the Santa Cruz Unit.
One of the major impetuses in Brazil’s economy is agribusiness, about 25% of the GDP. The sugar and ethanol sector produces renewable energy and biofuels from biomass, playing a key role in Brazil’s decarbonization efforts.
The sugar and ethanol sector plays a key role in renewable energy and biofuels from biomass. Biomethane in biodigesters is clean power sourced from vinasse and could substitute fossil fuels. It will also yield biofertilizers, enhancing the soil, further promoting sustainable agriculture.
Felipe Vicchiato, São Martinho CFO, said, “This new transaction strengthens our partnership with IFC and demonstrates the institution’s confidence in our sustainable and competitive business model, which invests in innovation to produce clean energy from renewable carbon, promoting economic growth, preserving the environment, and contributing to the social well-being of the communities where we operate.”
Also read: IFC Invests $200 Million in Ameriabank to Boost Climate Finance and Support MSMEs in Armenia
Ten Years of Investment Commitment to Brazil’s Agribusiness Industry
During the last decade, IFC invested significantly in sugarcane plantations, electricity cogeneration, and biogas production for Brazil’s agribusiness industry. This has helped accelerate the adoption of best practices in environmental and also gsocial sustainability.
It aligns with the World Bank Group’s strategy for Brazil, focused on building a productive, inclusive, and also sustainable economy. IFC aims to support Brazil in leading global climate efforts, through innovation, sustainability, and leverage for economic growth and competitiveness.
