Aperam Brazil (IFC-48478)

Regions
  • Latin America and Caribbean
Geographic location where the impacts of the investment may be experienced.
Countries
  • Brazil
Geographic location where the impacts of the investment may be experienced.
Specific Location
Region of Alto Jequitinhonha, Minas Gerais
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
A
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Borrower
Aperam S.A.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Agriculture and Forestry
  • Energy
  • Mining
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 275.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 275.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Oct 21, 2024

Disclosed by Bank Oct 18, 2024

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

The proposed IFC investment is a €250 million sustainability linked loan (SLL) to Aperam SA (Aperam), a global stainless-steel producer operating in Brazil, Belgium, and France. Aperam finances the expansion of Aperam BioEnergia (“BioEnergia” or the “Company”), its Brazilian subsidiary that produces and supplies charcoal to the Company’s blast furnaces for pig iron production. BioEnergia owns about 124,000 hectares (ha) in the Alto Jequitinhonha, Minas Gerais; 66% are Forest Stewardship Council (FSC)-certified eucalyptus plantations while the remainder is covered by native vegetation and infrastructure. BioEnergia currently produces 427,200 tons of charcoal annually, with plans to expand to 539,000 tons/year by 2033. In 2023, the company sourced 30,000 m3 of traceable wood from third parties for charcoal production. More than 30 communities live within the area of influence of BioEnergia's existing forestry operations, including four (4) Quilombola communities. These communities are included in the Aperam Acesita Foundation's stakeholder engagement and corporate social responsibility (CSR) programs. The use of proceeds will finance (i) the acquisition of 42,600 ha of land (including two properties, Jogil (approximately 27,700 ha) and SADA (approximately 1,900 ha), totaling 29,600 hectares already acquired and around 13,000 hectares yet to be acquired), (ii) the expansion of charcoal production capacity at existing charcoal-making units (CMU), (iii) the improvements in kiln efficiency and gas burner enhancements; (iv) the establishment of a bio-oil business line utilizing by-products from charcoal production; and (v) the expansion of seedling nursery capacity to meet the increasing demand for superior clonal seedlings from other forestry companies. Regarding the 29,600 ha of land already acquired, approximately one-third consists of established plantations. The remainder includes Legal Reserves (LR), Permanent Protected Areas (APP), and 5,000 ha inactive lands under natural regeneration. The location of the additional 13,000 ha to be acquired was not defined by the company yet at the time of appraisal.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

Contact Information
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ACCOUNTABILITY MECHANISM OF IFC/MIGA

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org.  You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

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