Company name

Paracel S.A.

Project number

13258-01

Category A projects could result in potentially significant environmental and/or social risks and impacts, which are diverse, irreversible, or unprecedented that may extend beyond the boundaries of the actual project site or facilities. In principle, Category A includes projects which have significant impacts on protected or sensitive areas21 and/ or vulnerable groups.

E&S category
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A

Country

Paraguay

Sector

Manufacturing

Status

Proposed

Disclosed date

07/01/2021

Projected date at which a project will be put forward for the Board of Executive Directors’ approval.

Projected board date
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01/23/2022

Approval date

N/A

Signed date

N/A

Sponsoring entity

N/A

Team leader

Parodi, Juan

Investment type

Financing requested

USD $ 200,000,000

Syndicated amount

USD $ 200,000,000

Financing amount

USD $ 200,000,000

Currency

USD

Project scope and objective

The proposed transaction consists of a senior secured A Loan to be provided to Paracel S.A. (“Paracel,” the “Company,” or the “Client”). Other international development finance institutions ("DFIs") are expected to participate under pari-passu Co-Loans ("Co-Loans").  Total Project costs (including mill capex, forestry, and financing costs) are estimated to be US$3.6 billion and are expected to be financed with a combination of equity and long-term debt.  

 

Paracel is a joint venture established by Copetrol (Paraguay) and Girindus Investments (Sweden), among other investors who have joined the Project afterwards. The Company is developing a greenfield kraft pulp mill and associated eucalyptus plantations (the “Project”) in the Departments of Concepción and Amambay, Paraguay. Paracel expected production is up to 1.8 million metric tons per year of Bleached Eucalyptus Kraft Pulp (“BEKP”). Paracel will be the largest industrial development and the largest private investment in Paraguay’s history, as well as the first large-scale pulp mill. The Project will outsource the development of the required export outbound logistics (river and seaports).  

 

Paracel is expected to generate approximately 220MW of renewable energy of which about 100MW are expected to be sold to the national grid. The mill will be located on a 1,200 hectare (ha) former cattle ranch 13 kilometers (km) due north of and 18 km by existing roads from the city of Concepción, on the left bank of the Paraguay river. The Paraguay river will be the water source for the mill and the receiving water body for treated effluents.  

 

A major Project component is the approximately 190,000 ha of former cattle ranch properties in the Departments of Concepción and Amambay owned and to be partially converted to eucalyptus plantations (the rest to be conserved) by the Company to supply wood to the mill in future years. The mill will consume about six million cubic meters of eucalyptus wood per year once operational1. The area of influence of the eucalyptus plantation properties includes nine indigenous communities of the Pai Tavyterá and Mbya guaraní ethnic groups of the guarani linguistic family. In addition, the urban area of Concepción has a multi-ethnic indigenous community in the area of influence for both the mill and plantations that is occupied by mostly speakers of the Maskoy language family. The Project will also construct ancillary facilities: i) a new substation at the mill site; and ii) a 25-km transmission line to connect the Project’s substation to the national grid. The Project will also include the following associated facilities: i) six worker lodgings in the city of Concepción, with a total capacity of 8,000 people; ii) a riverine port facility for loading pulp onto barges in Paraguay; and iii) an existing coastal shipping export terminal in Uruguay. 

 

The Project is being designed using the best available technology.  Its pre-construction phase initiated in January 2021 and construction is expected to last until November 2023, for a total of 28 months. Mill operation is estimated to initiate by the end of 2023.  

 

 

 

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Early disclosure

For projects with high environmental or social risk an Environmental and Social Strategy (ESS) is prepared early on during the project appraisal and prior to carrying out the environmental and social due diligence (ESDD). The ESS includes the initial E&S risk categorization and a brief description of potential Performance Standards applicable to the project. The ESS for this project is available below. Together with the ESS, IDB Invest also provides access to the client’s preliminary E&S documents that will be reviewed during the ESDD. The client E&S documents for this project can be found under the “CLIENT FILES” section below. Once the environmental and social due diligence is completed, an Environmental and Social Review Summary (ESRS) for the Project will be published on this page.

PARACEL-CLASSIFICATION AND ENVIRONMENTAL AND SOCIAL STRATEGY (ESS)-JUNE 28 2021

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Contact information

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Alternatively, you may also use the following contact information:

Client Contact

CONTACT NAME

Cyro Croce

POSITION

Environmental & Social Sustainability Manager

PHONE NUMBER

+595 2153 7445 ext. 560

EMAIL

cyro.croce@paracel.com.py

IDB Invest Contact

EMAIL

requestinformation@idbinvest.org

PHONE

+1(202)-566-4566

ADDRESS

1350 New York Ave NW, Washington, DC 20005

COUNTRY OFFICES

IDB Invest Country Offices