Financing a mega mill

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Arauco's Sucuriu mill in Brazil will cost $4.6 billion and is expected to start operating in the fourth quarter of 2027. In August 2025 Arauco closed $2.2 billion of loans for it. Two development banks, one export credit agency and a group of commercial banks sit in that package.

Published October 27, 2026 · Facts as of October 27, 2026 · 11 min read · Sources listed at the end

Facts as of October 27, 2026. This page states the facts as they stood on that date. Figures, rules and company plans may have changed since publication. We review this guide every six months and update the pages.

$4.6 billionArauco's planned cost of the Sucuriu mill and its forests, in Brazil, with 3.5 million tons a year of capacity ¹

$2.2 billionLoans Arauco closed in August 2025: $1.25 billion led by IDB Invest and IFC, and $970 million guaranteed by Finnvera ^3,5

54%Share of the plan paid by debt, $2.5 billion of $4.6 billion (our calculation from Arauco's plan) ¹

Q4 2027When Arauco expects Sucuriu to start operating; 74.4% of the work was done by July 31, 2026 ²

The 60-second version

What is it?

A mega mill is paid for before it earns anything. Owners use three kinds of money: their own equity and cash flow, loans guaranteed by an export credit agency, and loans led by development banks ^1,3.

Why does it matter?

A mill takes years to build and then months to reach full output. A lender has to cover that whole wait. Arauco's plan puts $4.5 billion of its $4.6 billion spending before the end of 2027, the quarter when it expects start-up ^1,2.

How does it work?

Arauco's plan for Sucuriu has $1.2 billion of equity, $0.9 billion of free cash flow and $2.5 billion of debt ¹. The debt that closed in 2025 was $2.2 billion, in two parts ^3,5.

Myth or fact?

"A new mega pulp mill is paid for with one large bank loan."

See the answer

Myth. Arauco's Sucuriu plan mixes equity, free cash flow and debt ¹. Its closed debt has two loans, with two development banks, an export credit agency and commercial banks ^3,4. UPM said in 2019 that it would pay for Paso de los Toros mainly from operating cash flow ¹⁴.

In this post

1. How does a company pay for a $4.6 billion pulp mill?
2. Who lent the money for Sucuriu?
3. How did other pulp mills pay for their construction?
4. What do the equipment suppliers have to do with the loans?
5. Do bonds pay for pulp mills?
6. How long is the cash out before the first bale?

01How does a company pay for a $4.6 billion pulp mill?

Arauco published its plan in September 2024. The Sucuriu project in Mato Grosso do Sul, Brazil, includes the mill, 400,000 hectares of eucalyptus plantation and 400 megawatts of power capacity. Its planned cost is $4.6 billion, for 3.5 million tons of bleached hardwood pulp a year ¹. Arauco's board approved construction on September 25, 2024. The head of Arauco in Brazil called it the largest pulp project in the world built in a single stage ²⁰.

The funding slide lists three sources: equity of $1,200 million, free cash flow of $900 million and debt of $2,500 million. The three add up to $4,600 million ¹. By our calculation, debt is 54.3% of the plan, equity is 26.1% and free cash flow is 19.6%. So the owner's own money and cash flow together pay 45.7%.

The same slide says Arauco was "evaluating different financing alternatives such as ECA's, Multilaterals, Bond issuances, among others" ¹. The sections below show which of these it used.

The debt that closed was $2.2 billion, which is $0.3 billion below the $2.5 billion in the plan. No source we found explains the difference.

Chart

Arauco's plan for paying for the Sucuriu mill

Millions of US dollars, total plan $4,600 million. Source: Arauco, Conference Call Sucuriu, September 2024 ¹. The three sources add up to $4,600 million. Closed debt in August 2025 was $2.2 billion ³.

02Who lent the money for Sucuriu?

Arauco closed the financing on August 21, 2025, with J.P. Morgan as global coordinator ⁶. The package is $2.2 billion in two loans ^3,4:

• A loan of $1.25 billion co-led by IDB Invest and IFC, with eight banks taking part. The law firm Simpson Thacher names them: JPMorgan, BBVA, Crédit Agricole CIB, HSBC, Santander, Bank of America, Bank of China (Panama Branch) and China Construction Bank (Asia) ⁴.
• An export credit agency loan of $970 million, guaranteed by Finnvera, the Finnish export credit agency. It pays for equipment from Valmet. Finnvera names J.P. Morgan SE, Crédit Agricole CIB and Banco Santander as lenders ⁵.

A J.P. Morgan Payments executive said of the ECA loan: "We are delighted to execute the largest transaction to date in Latin America" ⁵. The loan tenors, the lender-level amounts and the share of the loan that Finnvera guarantees were not published in the pages we read ^3,4.

The diagram shows how the two loan types work. For the guide to this product, see ECA-backed finance.

1. The owner needs equipment and plantationsA mill buys digesters, a recovery boiler and dryers from makers such as Valmet and Andritz ^5,8. Sucuriu's plan also includes 400,000 hectares of forest ¹.
2. An agency backs a bank loan for the equipmentBanks lend to the mill owner to pay the equipment maker. Finnvera guarantees the loan. At Kemi the cover was 80% of a EUR 500 million loan ¹². Sucuriu's cover share was not published ⁵.
3. A development bank keeps one part and sells the restIFC says it keeps a portion of the loan on its own account (the A loan) and sells participations in the rest (the B loan) to private lenders ⁷.
4. The borrower deals with one lender of recordIFC remains the sole contractual lender. B lenders get the same preferred creditor treatment as IFC's own loans ⁷.
5. The mill repays from pulp salesRepayment starts after the mill runs. Cerrado's credit period is 2 + 10 years, and the source does not explain the two parts ⁸.

03How did other pulp mills pay for their construction?

Export credit agency cover appears again and again. Finnvera guaranteed $800 million of credit for Suzano's Cerrado mill, signed on November 1, 2022. The loan pays for Andritz equipment, and the credit period is 2 + 10 years ⁸. In December 2022 IFC announced a $600 million sustainability-linked loan for Cerrado, of which $250 million is IFC's own money and $350 million was mobilized from other institutions ⁹. The two facilities add up to $1.4 billion (our sum). Suzano reports a total project cost of R$22.2 billion, of which R$15.9 billion is the plant ¹⁰.

In Finland, Metsä Fibre's Kemi mill had an investment value of EUR 1.6 billion in 2021. Finnvera gave an 80% guarantee on a EUR 500 million bank loan, and the European Investment Bank lent EUR 200 million ^12,13. Metsä Group later gave the mill's value as approximately EUR 2 billion ²².

The pattern is older than Sucuriu. For Montes del Plata in Uruguay, Finnvera guaranteed a 12-year, $900 million credit in 2011, inside about $1.35 billion of debt arranged with the Inter-American Development Bank ¹⁶. The mill and port later cost a reported $2.5 billion in total ¹⁷. That puts debt at about 54%, the same share as the Sucuriu plan. The debt figure dates from 2011 and the cost from 2014, so the match is a rough one.

UPM went another way. It said in 2019 that Paso de los Toros would be financed mainly from operating cash flow plus regular group financing ¹⁴. We found no export credit or development bank loan for that mill. Its final cost was $3.47 billion, about 16% above the $3.0 billion planned in 2019 (our calculation) ^14,15.

Compare

Published financing of new pulp mills

Company, lender and export credit agency releases ^{1,3,8,9,11,12,13,14,16}. Costs are as reported in the year shown and are not like for like.

Mill	Capacity a year	Reported cost	Financing named in the sources
Arauco Sucuriu, Brazil, 2025	3.5 million tons	$4.6 billion (plan)	Plan: equity $1.2 billion, free cash flow $0.9 billion, debt $2.5 billion. Closed: $1.25 billion IDB Invest and IFC loan with eight banks, and $970 million loan guaranteed by Finnvera 1,3,5.
Suzano Cerrado, Brazil, 2022	2.55 million tons	R$22.2 billion	$800 million guaranteed by Finnvera, credit period 2 + 10 years; $600 million IFC sustainability-linked loan 8,9,10.
Arauco MAPA line 3, Chile, 2019	1.56 million tons	Not in our sources	EUR 555 million guaranteed by Finnvera over 8.5 years 11.
Metsä Fibre Kemi, Finland, 2021	1.5 million tons	EUR 1.6 billion in 2021	EUR 500 million bank loan with 80% Finnvera cover, plus EUR 200 million from the European Investment Bank 12,13.
UPM Paso de los Toros, Uruguay, 2019	2.1 million tons	$3.47 billion final; $3.0 billion planned	Mainly operating cash flow plus regular group financing. No export credit or development bank loan found 14,15.
Montes del Plata, Uruguay, 2011	1.3 million tons	$2.5 billion for mill and port (2014)	$900 million, 12-year credit guaranteed by Finnvera, inside about $1.35 billion of debt arranged with the IDB 16,17.

Finnvera guaranteed a $900 million, 12-year credit for Montes del Plata in Uruguay in 2011 ¹⁶.

04What do the equipment suppliers have to do with the loans?

The export credit loans pay for capital goods: the digesters, the recovery boiler and the pulp dryers. Finnvera's pages name the equipment makers. Andritz supplies Cerrado ⁸. Valmet supplies Sucuriu ⁵. For Arauco's MAPA line 3 in Chile, Finnvera guaranteed a EUR 555 million credit over 8.5 years that covers equipment and services from Valmet and Andritz ¹¹.

In each case the exporter is the equipment maker, and the borrower is the mill owner. Two of these deals name a guarantee holder, a bank. At Cerrado that bank was HSBC. At MAPA it was BNP Paribas Fortis ^8,11. In trade finance language this is a buyer credit: a loan to the overseas buyer so that it can pay the equipment seller.

These loans pay for equipment. The pulp cargoes that the mill ships later are financed in other ways; see cash in the chain.

05Do bonds pay for pulp mills?

Corporate bonds exist in this industry. No bond we found names a single mill.

Suzano issued a sustainability-linked bond of $750 million and then a further $500 million, due January 15, 2031, with a 3.75% coupon. The proceeds funded a tender offer to buy back older notes ¹⁸. CMPC issued $500 million of green sustainability-linked bonds in 2023, with proceeds for projects such as water management and energy efficiency ¹⁹. Arauco's Sucuriu slide lists bonds only as an option ¹.

When you read a bond, ask what the money pays for. In Suzano's case the answer was a buyback of older notes. Once a mill runs, finance linked to the pulp itself can follow; see structured commodity finance.

06How long is the cash out before the first bale?

Arauco's slide gives spending by year: $0.2 billion in 2024, $1.3 billion in 2025, $1.8 billion in 2026, $1.2 billion in 2027 and $0.1 billion in 2028 ¹. These add up to $4.6 billion. Our running totals are $1.5 billion by the end of 2025, $3.3 billion by the end of 2026 (71.7% of the plan) and $4.5 billion by the end of 2027 (97.8%).

Arauco's own progress measure is different. Its 2Q 2026 report puts total project progress at 74.4% on July 31, 2026, 6.3% ahead of schedule, with operations to start in the fourth quarter of 2027 ². Spending shares and progress shares measure different things and should not be compared.

For a lender, the point is the long wait. About three years pass between board approval in September 2024 and the expected start-up ^2,20. The Sucuriu financing closed in August 2025, about a year after approval ^6,20. Delays add to the cash need. UPM's Paso de los Toros was ready for start-up on March 31, 2023, against a plan for the second half of 2022 ^14,15. Kemi stopped after an explosion in its evaporation plant and restarted in June 2024 ²². See why new mills are so big and who builds the mills. For the countries that host these mills, see Brazil and Chile and Uruguay.

Where the cash goes

Arauco's planned cash out for Sucuriu, 2024 to 2028

1. 2024
   $0.2 billionThe board approves construction on September 25, 2024 ²⁰. Arauco's plan puts first-year spending at $0.2 billion ¹.
2. 2025
   $1.3 billionPiling starts on February 11, 2025 ²¹. The $2.2 billion of loans closes on August 21, 2025 ⁶.
3. 2026
   $1.8 billion, the peak yearArauco reports total progress of 74.4% on July 31, 2026 ². Running total in the plan: $3.3 billion.
4. 2027
   $1.2 billionArauco expects operations to start in the fourth quarter ². Running total in the plan: $4.5 billion.
5. 2028
   $0.1 billionThe last planned spending falls after start-up. The plan totals $4.6 billion ¹.

Yearly amounts are Arauco's September 2024 plan, not reported spending ¹. Running totals are our sums.

What this means for traders

• A mega mill is paid for with several kinds of money at once. Ask which part is equity, which part is debt and who guarantees the debt.
• Equipment loans backed by an export credit agency pay for machines. Pulp cargoes need different finance, and the corporate bonds we found do not name a single mill.
• The Sucuriu pages we read leave out tenor, cover share and lender amounts. Ask for them before you compare two deals.

Questions traders ask

How much did Arauco plan to borrow for the Sucuriu mill?

Arauco's September 2024 plan has debt of $2.5 billion in a total of $4.6 billion. The loans that closed in August 2025 came to $2.2 billion. No source we found explains the $0.3 billion difference.

What is an A/B loan?

IFC describes it this way: IFC keeps part of the loan on its own account as the A loan and sells participations in the rest to private lenders as the B loan. IFC stays the only lender of record, and B lenders receive the same preferred creditor treatment as IFC's own loans.

What does Finnvera do in a pulp mill loan?

Finnvera is the Finnish export credit agency. It guarantees bank loans that pay for equipment from Finnish exporters such as Valmet and Andritz. It guaranteed $970 million for Sucuriu and $800 million for Cerrado.

Did UPM borrow from an export credit agency for Paso de los Toros?

We found no export credit or development bank loan for that mill. In 2019 UPM said the project would be financed mainly from operating cash flow, with regular group financing.

Do green bonds pay for new pulp mills?

The Suzano and CMPC bonds we found do not name a single mill. Suzano used its bond proceeds to buy back older notes. CMPC listed projects such as water management and energy efficiency.

Read next

• Inside the millWho builds the mills, and who finances them
• Inside the millWhy new pulp mills are so big
• Money and rulesCash in the chain: terms, letters of credit and stock at ports
• Makers and buyersBrazil: can the largest pulp exporter keep growing?
• Makers and buyersChile and Uruguay: big mills, small countries
• Money and rulesPulp watch: every rule and date in one place
• Ossiano Trade Finance GuideHow each trade finance instrument works
• GlossaryTrade finance terms in plain English

Financing a pulp mill or the pulp it makes? Ossiano Capital works on trade finance for pulp and paper trades.

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Sources and notes

1. Arauco, Conference Call Sucuriu (presentation), September 2024. https://arauco.com/wp-content/uploads/2024/09/Conference-Call-Sucuriu-VF4.pdf
2. Arauco, Form 6-K, results for the second quarter of 2026 (results call August 19, 2026). https://www.sec.gov/Archives/edgar/data/0001004156/000157587226000589/ara030_ex99-1.pdf
3. IFC, press release on the financing for Arauco's Sucuriu project, August 25, 2025. https://www.ifc.org/es/pressroom/2025/ifc-idb-invest-finnvera-partner-in-landmark-financing-to-arauco-to-boost-sustainab
4. Simpson Thacher and Bartlett, Arauco closes $2.2 billion landmark financing for its Sucuriu project in Brazil, August 22, 2025. https://www.stblaw.com/about-us/news/view/2025/08/22/arauco-closes-$2.2-billion-landmark-financing-for-its-sucuriu-project-in-brazil
5. Finnvera, Finnvera guarantees Finnish exports worth USD 970 million to Arauco's major project, September 18, 2025. https://www.finnvera.fi/eng/export-and-internationalisation/finnvera-as-an-export-finance-provider/guaranteed-transactions/valmet-delivers-equipment-to-the-worlds-largest-pulp-mill-under-construction-in-brazil-finnvera
6. Arauco, Arauco successfully closes a US$2,200 million financing for its Sucuriu project in Brazil, August 21, 2025. https://arauco.com/en/esarauco-cierra-con-exito-un-financiamiento-de-us2-200-millones-para-su-emblematico-proyecto-sucuriu-en-brasil-con-la-participacion-de-finnvera-bid-invest-e-ifc-enarauco-successfully-clo/
7. IFC, B Loans (description of the A/B loan structure), accessed October 2026. https://www.ifc.org/en/what-we-do/sector-expertise/syndicated-loans-and-mobilization/b-loans
8. Finnvera, Large equipment and service deliveries from Andritz to a pulp plant in Brazil with Finnvera's guarantee, January 13, 2023. https://www.finnvera.fi/eng/export-and-internationalisation/finnvera-as-an-export-finance-provider/guaranteed-transactions/large-equipment-and-service-deliveries-from-andritz-to-a-pulp-plant-in-brazil-with-finnveras
9. IFC, IFC's sustainability-linked loan to Suzano will boost growth, December 23, 2022. https://www.ifc.org/en/pressroom/2022/ifc-s-sustainability-linked-loan-to-suzano-will-boost-growth-and
10. Suzano, Suzano starts operation of the world's largest pulp production line, July 21, 2024. https://www.suzano.com.br/en/news-post/suzano-starts-operation-of-the-worlds-largest-pulp-production-line
11. Finnvera, The pulp mill modernisation and expansion in Chile is one of the largest pulp mill investments at the moment, October 7, 2019. https://www.finnvera.fi/eng/export-and-internationalisation/finnvera-as-an-export-finance-provider/guaranteed-transactions/the-pulp-mill-modernisation-and-expansion-in-chile-is-one-of-the-largest-pulp-mill-investments-at
12. Finnvera, Finnvera guarantees Metsä Fibre's investment in Kemi, March 1, 2021. https://www.finnvera.fi/eng/export-and-internationalisation/finnvera-as-an-export-finance-provider/guaranteed-transactions/finnvera-guarantees-metsa-fibre-s-investment-in-kemi
13. European Investment Bank, press release 2021-054, EIB backs Metsä Group's new bioproduct mill, February 11, 2021. https://www.eib.org/en/press/all/2021-054-eib-backs-metsa-group-s-new-bioproduct-mill
14. Bioenergy International, UPM invests US$3 billion in a world-class pulp mill in central Uruguay, July 2019. https://bioenergyinternational.com/upm-invests-us3-billion-in-a-world-class-pulp-mill-in-central-uruguay/
15. UPM, UPM Paso de los Toros pulp mill ready for start-up, March 31, 2023. https://www.upm.com/news-and-stories/releases/2023/03/upm-paso-de-los-toros-pulp-mill-ready-for-start-up-major-milestone-in-the-transformative-growth-investment-in-uruguay/
16. Finnvera, Finnvera covering export credit financing for Montes del Plata pulp mill project in Uruguay, September 30, 2011. https://finnvera.fi/eng/finnvera/newsroom/press-releases/finnvera-covering-export-credit-financing-for-montes-del-plata-pulp-mill-project-in-uruguay
17. Pulpapernews, Stora Enso inaugurates Montes del Plata pulp mill, September 10, 2014. https://www.pulpapernews.com/20190804/5778/stora-enso-inaugurates-montes-del-plata-pulp-mill
18. Environmental Finance, Bond Awards 2021, Sustainability-linked bond of the year: Suzano. https://www.environmental-finance.com/content/awards/winners/sustainability-linked-bond-of-the-year-suzano.html
19. Sullivan and Cromwell, S&C advises CMPC in launching USD 500 million green sustainability-linked bonds, July 5, 2023. https://www.sullcrom.com/About/News-and-Events/Highlights/2023/July/S-C-Advises-CMPC-in-Launching-500-Million-Green-Sustainability-Linked-Bonds
20. Arauco, ARAUCO's Board Approved Construction of the Sucuriu Project, September 25, 2024. https://arauco.com/en/directorio-de-arauco-aprueba-construccion-del-proyecto-sucuriu/
21. Valmet, Arauco Sucuriu project: one year of site works proceeding on schedule, 2026. https://www.valmet.com/insights/articles/pulp/arauco-sucuriu-one-year-site-operations/
22. Metsä Group, Metsä Group Kemi bioproduct mill inaugurated, October 23, 2024. https://www.metsagroup.com/news-and-publications/news/2024/metsa-group-kemi-bioproduct-mill-inaugurated/

Trade figures come from UN Comtrade (2015 to 2025, as reported by 10 countries) and FAOSTAT (1961 to 2024), checked and recalculated by us; each chart names whose data it uses. All tons are metric tons. All facts on this page are as of October 27, 2026, the date of publication, and may have changed since. For rules and tariffs, check the pulp watch before you act.

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