Montes del Plata to Build $1.9bn Pulp Plant

Montes del Plata, a joint venture between Finland’s Stora Enso and Chile’s Arauco, will build a $1.9bn pulp mill in Uruguay. The new mill is expected to produce 1.3m tons of pulp per year and be fully operational by the end of Q1 2013, Stora Enso says. Stora Enso and Arauco will each take a 50% stake in the mill. Around 40% of the project will be funded through equity, with the rest coming from loans raised by Montes Plata. Arauco is expected to fund its stake with proceeds from previous bond issues. Negotiations for the loans are taking place with regional and international banks, as well as multilaterals and Export Credit Agencies. Details of who will provide the loans, which could be either bilateral or syndicated, are expected in March.