Bracell secures R$1.5bn from BTG for forest planting

BTG, the biggest winner among private banks in the second auction of Eco Invest Brasil, a program that combines public and private funding to leverage investment in sustainable projects, has a total of R$4.9 billion to allocate toward the productive restoration of degraded land in Brazil, which was the focus of this round.

With the amount offered in the second auction—made up of 40% Treasury resources and the remainder raised by BTG from investors—the bank committed to enabling the restoration of 164,000 hectares of degraded land, converting them into agricultural and forestry production systems.

The Bracell contract, representing roughly one-third of the total area BTG aims to restore, was the first agreement signed and will allow for the recovery of 54,000 hectares in Brazil’s Cerrado biome. The financing line has a 10-year term, and Bracell could begin construction of the new facility in Bataguassu later this year. Under that timeline, the mill, with annual production capacity of 2.8 million tonnes, could begin operating in 2029.

“This transaction is a win-win: financing terms compatible with eucalyptus’s seven-year cycle, at competitive cost, while also restoring degraded land,” said Rogerio Stallone, the BTG partner responsible for corporate credit.

According to the executive, the favorable cost and maturity terms offered through Eco Invest ultimately made possible an investment in land restoration that Bracell might not have pursued under standard market conditions.

In an emailed statement, Bracell’s vice president of finance banking, Claudio Pitchon, said the operation will enable “the expansion of our forest base, while also contributing to carbon capture and storage.”

According to Pitchon, Bracell is currently one of Brazil’s largest green loan borrowers. “The structure of this transaction reinforces the advancement of financial solutions aligned with Brazil’s climate agenda, connecting private capital to projects with verifiable environmental impact,” he said.

Bracell, which operates mills in Bahia and São Paulo and is one of the world’s largest producers of dissolving pulp, does not disclose the size of its eucalyptus land holdings in Brazil. The company has pledged, however, to preserve one hectare of native vegetation for every hectare of eucalyptus planted.

According to Rafaella Dortas, BTG’s partner and ESG director, the bank assessed the socio-environmental requirements for participating in the second Eco Invest auction and concluded it had the internal capacity to manage the program’s required monitoring, including hectares restored and carbon stored. “It is a financially competitive transaction and operationally feasible from a risk perspective,” she said.