IDB Invest and Pantaleón Promote the Sustainable Sugarcane Sector in Guatemala
IDB Invest provided a $70 million long-term financing to Pantaleón S.A., one of the main sugarcane producers in Central America and the second-largest in Guatemala. IDB Invest will contribute $50 million while the remaining $20 million will come from funds managed by the IDB Group.
Pantaleón will use the funds to finance its agricultural and industrial fixed investment plans and its working capital needs. The project will support the Company in creating efficiencies both in its production and in the use of resources in the cultivation of sugarcane, through the combination of climate-smart practices and technology, seeking to reduce its exposure to the volatility of the climate and international prices.
With the implementation of agricultural investments, Pantaleón estimates that it will be able to increase its agricultural productivity, reduce the need for irrigation per hectare cultivated, and reduce its greenhouse gas emissions. In turn, industrial investments aim to increase the efficiency of its operations and its installed capacity, especially in the production of sugar with a higher added value.
The project is complemented with technical advice that aims to support the company in reducing its carbon footprint in its agricultural and industrial operations, through innovative measures of energy efficiency and climate-smart agriculture, as well as making Suelo Vivo projects more efficient, exploring agricultural practices that take use endemic microorganisms, to control pests and diseases, as well as increase soil fertility, yield, and nutrients.
With this transaction, IDB Invest seeks to improve the sustainability of a sector with an important economic and social role in Guatemala, which employs more than 334,000 people, especially in rural areas of the country. Guatemala is the sixth-largest sugar exporter in the world, which makes the sector a strong generator of foreign exchange.
This funding is expected to contribute to six of the Sustainable Development Goals (SDGs): Clean Water and Sanitation (SDG 6), Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Climate Action (SDG 13) and Partnerships to achieve the goals (SDG 19).
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of US $13,1 billion in assets under management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that respond to the needs of its clients in a variety of sectors.
Pantaleón, S.A. It is the second sugar mill in Guatemala, producing more than 500,000 tons annually. Pantaleón was born in 1849 on the southern coast of Guatemala and is dedicated to the responsible cultivation and processing of sugar cane for the production and commercialization of sugar, honeys, alcohols, and electricity, from biomass. Pantaleón, S.A. is part of Grupo Pantaleón, which has operations in six countries, producing 1,4 million tons of sugar annually and employing more than 18,400 people during the harvest season.