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

July 20, 2023, 11:01 AM

The resouces will be invested in a co-processing project at the Salto de Pirapora cement plant
aimed primarily at increasing the site’s thermal substitution
rate and reducing its CO2 emissions.

Votorantim Cimentos, a building materials and sustainable solutions company, signed a
financing agreement with the International Finance Corporation (IFC), the largest global
development institution focused on the private sector in emerging markets and a member of the
World Bank Group.

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 sustainabiliy-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

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.