By Brazil Stock Guide – Brazil’s development bank BNDES approved a R$1.05 billion support package for Eldorado Brasil Celulose to build an 86.7-kilometer railway in Mato Grosso do Sul, marking the first project financed through infrastructure debentures issued under Brazil’s new Law 14,801. The line will connect Eldorado’s pulp mill in Três Lagoas to the company’s logistics terminal in Aparecida do Taboado, strengthening export flows for one of Brazil’s most competitive industrial segments.
The package combines a R$1 billion subscription by BNDES to infrastructure debentures—an issuance coordinated by the bank itself—with a R$50 million bilateral loan via its Finem credit line. It is the first local-market debenture structured under Law 14,801 of 2024, which shifted tax incentives from investors to issuers and broadened the toolkit for long-term infrastructure funding. The notes also introduce a second novelty enabled by the law: remuneration indexed to a foreign-exchange variation clause, designed to better match revenue profiles in export-oriented projects.
Beyond financing mechanics, the railway is expected to reshape Eldorado’s logistics. Today, pulp shipments rely heavily on road transport—about 50,000 truck trips a year. Once operational, the rail link is projected to cut logistics costs while reducing annual carbon emissions by roughly 87%, or about 105,000 tons of CO₂. During construction, the project is expected to generate more than 3,000 direct and indirect jobs, according to the bank.
The new line will plug into the national rail network through connections at Aparecida do Taboado, providing access to corridors operated by Rumo that link Brazil’s agricultural heartland to the Port of Santos. Eldorado already operates a dedicated terminal in Santos capable of exporting up to 3 million tons of pulp a year, designed for 72-wagon train sets and inaugurated in 2023 to support higher volumes and greater scale.
For BNDES, the transaction reinforces a broader strategy of using balance-sheet strength to catalyze private capital and deepen Brazil’s infrastructure capital markets. For the pulp industry—where Brazil ranks among the world’s top three producers—the project underscores a shift toward rail as both a cost and sustainability lever, aligning industrial expansion with the government’s climate and logistics agendas.
Leave a Reply