BTG Pactual lends R$1.5B to Bracell to plant eucalyptus on degraded land in Brazil
What's the deal? BTG PactualDealroom has a profile for this one. Try Dealroom →, Brazil's largest investment bank, has granted a R$1.5 billion (roughly $265M) loan to cellulose producer BracellDealroom has a profile for this one. Try Dealroom → to convert 54,000 hectares of degraded land into eucalyptus plantations in the state of Mato Grosso do Sul. The average restoration cost will be about R$27,700 per hectare.
The funds will go toward planting, harvesting, transport, and equipment purchases on the converted areas. Eucalyptus wood is the primary raw material for Bracell's cellulose production.
Why now? The loan was made under the second auction of Brazil's Eco Invest programme, a government-backed blended finance initiative that pairs subsidised public capital with private funding. The Treasury offers banks resources at just 1% annual interest, requiring them to leverage that money with private capital — lowering the overall cost for borrowers.
Bracell, controlled by Singapore-based Royal Golden Eagle (RGE), has been expanding its forestry base into Mato Grosso do Sul after establishing operations in São Paulo and Bahia. The financing aligns with both the company's growth plans and Brazil's push to restore degraded land.
Claudio Pitchon, Bracell's vice president of finance banking, said the competitive rate wasn't the main draw. "The real motivation is the seal of approval this operation brings, given the level of requirements and what we're committing to," he said.
What could go wrong? Critics of large-scale eucalyptus plantations often point to biodiversity concerns — monoculture tree farms are ecologically different from native forest restoration. Whether converting degraded pasture to eucalyptus qualifies as genuine environmental recovery is a matter of ongoing debate in Brazil.
The exact cost of the loan was not disclosed, and the blended finance structure — while attractive — depends on continued government willingness to subsidise capital at below-market rates.
The signal: BTG Pactual, Latin America's largest investment bank, is increasingly positioning itself as a conduit for green finance — and Brazil's Eco Invest blended finance structure gives it a mechanism to do so at scale. For Bracell, a late-growth-stage global cellulose producer, the deal locks in subsidised capital while lending ESG credibility to its eucalyptus expansion on degraded land. The broader test is whether blended finance instruments like Eco Invest can sustain deal flow as Brazil's land restoration ambitions grow — and whether monoculture forestry continues to qualify.
Read more: capitalreset.uol.com.br
