Project Sponsors are Unialco SA (Unialco), of Brazil, with 50%; Manuelita SA (Manuelita), of Colombia; and Pantaleon Sugar Holdings Co. Ltda. (PSH), of Guatemala. Manuelita and PSH will participate in the Project through an equally-owned special purpose company named Colgua SA (Colgua) that owns 50% of the company.

The total project cost is estimated at $108 million. The proposed IFC investment includes a $28 million A loan and a $7 million convertible C loan for IFC’s own account, for a total of $35 million.

35.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	35.0
Equity

* These investment figures are indicative

The project will be built in a greenfield site, approximately 20km of the city of Suzanapolis, in the north-western region of the state of Sao Paulo. The site is located in the center of the area that will be used to produce sugar cane to supply the project. The area around the project’s site is currently used for low density cattle ranching.

The project will be the first sugar/ethanol mill in this corner of the state, a region with one of lowest incomes in São Paulo, and will have an important development impact through:

- job creation and diversification in a primarily agricultural region that has few job opportunities due to concentration in low density cattle ranching;
- tax generation for a municipality that has low tax revenues, which will allow it to invest in public services;
increased income generation for the region’s farmers (sugar cane provides a better return than cattle ranching); and
- the possibility of attracting other sugar/ethanol investments for this region.

Besides providing scarce long term financing for the project IFC will:

- help strengthen the environmental and social policies of the company;
- support the first south-south investment in the sector;
- continue its support for the expansion, increased professionalism and consolidation of the Brazilian sugar/ethanol sector.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

This is a new mill and modern sustainability practices in the industry have advanced significantly in recent years enabling sugar mills improve environmental & social performance. Vale do Parana will have a proactive approach to resolving the impacts listed below.

The review analyzed the following potential environmental, health and safety, and social impacts:

- Management systems for environmental, health & safety and social affairs;
- Land acquisition process and land use permits;
- Environmental planning and permits;
- Sustainability and quality of potable water supply;
- Management of emissions to the environment (liquid effluent, solid waste and air emissions)
- Hazardous material management;
- Biological and chemical control of pests;
- Working conditions for direct and contracted employees, including sugar cane workers;
- Occupational health and safety in plantations and facilities;
- Sources of sugar cane for the new mill and if construction and operation of the new mill will have economic or social displacement consequences;
- Community development.

The identified environmental, social and health and safety impacts which require ameliorative activities are summarized in a Environmental and Social Action Plan (ESAP) that Vale do Parana will implement as part of IFC’s Loan Agreement. Upon successful implementation of the agreed mitigation measures, the proposed Project will meet Brazilian laws and regulations as well as the applicable World Bank/IFC environmental, social and health and safety policies and guidelines.