Stora Enso's and Arauco's Montes del Plata Joint-venture Finalises Project Financing
Helsinki, Finland, Sep 29, 2011 - Stora Enso’s and Arauco’s Montes del Plata joint-venture pulp mill project is proceeding and the external financing for the project has been finalised. Montes del Plata has signed the loan agreements and as part of the financing arrangements, Stora Enso has signed an agreement to guarantee 50% of USD 1 354 million of loans raised by Montes del Plata. Stora Enso’s 50% share of the total guarantee will be a maximum of USD 677 million (EUR 498 million). The project is financed by USD 900 million of export credit financing with twelve years tenor, by an A loan of USD 200 million with twelve years tenor from the Inter-American Development Bank (IDB) and by a B loan of USD 254 million with nine years tenor from commercial banks through IDB.
“We welcome the support of Finnvera, Finnish Export Credit (FEC), Swedish Export Credit (SEK), IDB and other financing institutions for this exciting, strategically important project. We are also pleased with the long maturity of the credit facility,” says Stora Enso CFO Markus Rauramo.
As announced on 18 January 2011, Montes del Plata will build a new state-of-the-art 1.3 million tonnes per year pulp mill at Punta Pereira, in the department of Colonia, Uruguay. The total investment is estimated to be approximately USD 1.9 billion (EUR 1.4 billion). Each of the joint-venture shareholders has a 50% stake in the mill’s equity and will be entitled to half of its output. The project will be financed through equity and loans raised by Montes del Plata. Stora Enso is consolidating its 50% share with the equity method.
The project comprises a pulp mill with Best Available Techniques, a deepwater port and a power generating unit based on renewable resources. The new mill is expected to be operational by the end of the first quarter of 2013.