Linklaters advises on $1.1bn financing of Brazil wood pulp plant

Linklaters has advised the sponsors and the borrower on the $1.1 billion financing of a dissolving wood pulp plant in Brazil, and which will be one of the most energy-efficient in the world.

The law firm advised Austrian cellulose fibre producer Lenzing and Brazilian wood panel manufacturer Duratex as sponsors, and their joint venture LD Celulose as borrower, in connection with the $1.1 billion financing to build one of the largest dissolving wood pulp plants in the world.

The International Finance Corporation (IFC) and the Inter-American Development Bank (IDB, acting through its private investment arm, IDB Invest) are co-leading the financing to LD Celulose.

The financing will support the construction of a dissolving wood pulp mill and the installation of a co-generation power plant in Minas Gerais, Brazil. with a capacity of 144MW.

As part of the project, LD Celulose will also sustainably plant and manage  eucalyptus plantations which will feed the 40 per cent of excess bioelectricity generated on-site as green energy into the public grid.

This project will strengthen the competitiveness of Brazil’s pulp industry, create jobs, and support the country’s efforts towards climate change mitigation, the law firm said.

LD Celulose plans to be operational in 2022.

Linklaters had previously advised Duratex in June 2018 in structuring the joint venture with Lenzing for the development of the project.

The Linklaters team was led by partners Gabriel Silva (pictured) and Andrew Compton, with support from partner Vanessa Havard-Williams, managing associates Aileen Buchanan and Michelle Lo, and associates Alex Weaver, Audrey Telfer, Isabella Correa and Enrico Gätsch.