Votorantim Cimentos and IFC Sign a US$150 Million Financing Agreement

Votorantim Cimentos is the first Brazilian cement company to sign with IFC a contract linked to sustainability indicators. The US$ 150 million investment will be allocated to the Salto de Pirapora plant to increase its thermal substitution rate and reduce its CO₂ emissions. The project is part of the company’s long-term sustainability strategy and is expected to be completed by 2028.

The financing agreement, a sustainability-linked loan, is linked to sustainability commitments and specifies that the financial cost for the company may decrease depending on the achievement of Votorantim Cimentos’ CO₂ reduction target as approved by the Science Based Targets initiative (SBTi).

Additionally, IFC will provide technical advisory to other projects that are part of the company’s decarbonization journey.

Currently, more than 30% of the fuels used by the Salto de Pirapora plant are considered alternative fuels (biomass, wood chips, used tires and refuse-derived fuel - RDF), reducing the use of fossil fuel. The implementation of this project is expected to double the site’s capacity to use alternative fuel.

“This project is an important step in our decarbonization journey and is in line with Votorantim Cimentos’ 2030 Sustainability Commitments. We are excited to not only sign this financing agreement with an institution like IFC, which has climate change as one of its priorities, but also to establish a partnership for initiatives in our sustainability agenda,” said Álvaro Lorenz, global director of Sustainability at Votorantim Cimentos.

For Bianca Nasser, global CFO of Votorantim Cimentos, the project illustrates the need for alignment between the finance and sustainability areas of companies, in addition to the importance of maintaining relationships with multilateral agencies. “The decarbonization agenda is one of the biggest challenges for the coming years. Being able to benefit from competitive and long-term loans through partnerships with institutions such as IFC will be essential to enable new projects,” said Nasser.

According to Carlos Leiria Pinto, country manager of IFC in Brazil, “the cement industry is a fundamental part of the future development and urbanization of developing countries and, therefore, essential for sustainable economic growth. IFC’s investment in Votorantim Cimentos represents an important steppingstone in the process of improving greener supply capacity in the cement sector, paving the way to attracting more investment and further developing Brazil’s infrastructure”.

Decarbonization journey – Votorantim Cimentos’ 2030 decarbonization target is to reach 475 kg of CO₂ per tonne of cement, which represents a 24.8% reduction in emissions compared to the base year 2018. Between 1990 and 2022, Votorantim Cimentos reduced its global CO₂ emissions per tonne of cement by 24%. In 2022, the company’s global emissions totaled 579 kg of CO₂ per tonne of cement produced, 3% lower than 2021.

One of the primary contributors to this result is co-processing, a technology that replaces fossil fuel with other materials, such as waste and biomass, in cement production kilns. In Brazil, last year, 31.3% of the fuel used by Votorantim Cimentos plants was from alternative sources. In 2022, the company’s Brazilian operations used 1.3 million tonnes of waste and biomass—a 20% growth compared to 2021, when 1.1 million tonnes were co-processed.

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