How São Martinho is contributing to Brazil’s energy transition

Best Sustainable Treasury Solution

Highly Commended Winner

São Martinho

Photo of Felipe Vicchiato, São Martinho.

Felipe Vicchiato

CFO

Brazil

São Martinho S.A. is one of the largest publicly traded sugar-energy groups in Brazil, specialised in the production of sugar, ethanol and bioenergy. Headquartered in Pradópolis, São Paulo, the company operates four highly mechanised mills, producing raw sugar, ethanol (hydrous, anhydrous and industrial), and cogenerating electricity from sugarcane bagasse.

The challenge

Before implementing the solution, the company faced a challenging funding environment for large-scale investments in new bioenergy capacity. The expansion of the corn ethanol operation required significant long-term capital to support construction of new industrial infrastructure, some of the operational expenditure needs of the project, additional grain processing capacity and storage facilities.

However, securing funding on competitive terms was complex due to the capital-intensive nature of the project, long payback horizon, and volatility associated with agricultural commodities and energy markets, especially in Brazil.

At the same time, the project was strategically important. Expanding corn ethanol production would allow the company to diversify revenues even further beyond sugarcane-based products, increase operational efficiency through industrial integration and strengthen its position in the low-carbon fuels market.

The solution

To enable the expansion of its corn ethanol production capacity, the company structured a tailored financing solution combining development-oriented funding with market-based instruments to secure long-term capital under competitive conditions.

The project aligned with Brazil’s broader energy transition agenda and was connected to the Eco Invest Brazil programme, a federal initiative designed to mobilise financing for sustainable infrastructure, including renewable fuels and bioenergy. The financing was arranged by Itaú, one of the financial institutions awarded resources under the programme’s auction mechanism. Through this structure, the bank was able to access funding provided by the Brazilian Treasury and incorporate it into the financing package offered to the company.

Acting as the structuring bank, Itaú worked alongside the company to structure a financing package tailored to the project’s scale, tenor and sustainability characteristics, providing long-term capital while optimising funding efficiency.

“Winning the Adam Smith Award is a great honour for São Martinho and a meaningful recognition of our commitment to innovation, sustainability and excellence in treasury management.

This award reflects the dedication and collaboration of our entire team, as well as the strong partnership we have built with our financial institutions and stakeholders. It recognises not only a successful transaction, but also our ability to develop innovative financial solutions that support the company’s long-term strategy while creating a positive impact.

We are very proud to have our work recognised by such a prestigious international award.”

Felipe Vicchiato, CFO

Best practice and innovation

This transaction combined strategic funding diversification, disciplined risk management and alignment with sustainability objectives.

Firstly, the solution illustrates effective use of public policy frameworks to support private sector investment. By accessing financing structured through a financial institution participating in the Eco Invest Brazil programme, the company was able to link its expansion project to a national initiative supporting the energy transition, while maintaining a market-based financing structure. This approach enabled the company to secure long-term funding on competitive conditions while preserving financial flexibility.

Secondly, the transaction reflects strong treasury discipline through the integration of funding and risk management strategies, ensuring that financing objectives were aligned with the project’s long-term risk profile.

Finally, the solution demonstrates how close collaboration between the corporate treasury team and its banking partner can create an efficient capital structure for large-scale industrial investments, enabling complex energy transition projects to be financed in a financially sustainable and risk-managed manner.

Key benefits

Cost savings.
Risk mitigation.
Exceptional implementation (budget/time).
Future-proof solution.
Improved key performance indicators (KPIs) or metrics.
Quality accreditation achieved.

The financing solution played a critical role in enabling the expansion of the company’s corn ethanol production, supporting the objective of strengthening long-term competitiveness and diversifying its bioenergy portfolio.

This solution is impactful because it enabled a large-scale industrial investment that strengthens the company’s long-term competitiveness while contributing to Brazil’s energy transition, regional development and job creation in Quirinópolis, a very small municipality in the state of Goiás.

From a financial perspective, the funding structure was instrumental in making the project viable. The expansion of corn ethanol production required substantial upfront capital and long investment horizons.

Finally, the project contributes to environmental progress by expanding the production of low-carbon biofuels. By increasing the availability of renewable fuels and promoting the efficient use of agricultural resources, the initiative supports decarbonisation and reinforces the role of bioenergy as a key component of the global energy transition. Together, the innovative funding structure, industrial expansion and regional impact demonstrate how disciplined treasury strategy can enable projects that generate lasting economic, environmental and social value.

The Adam Smith Awards are the industry benchmark for best practice and innovation in corporate treasury. The 2026 awards attracted 635 nominations. To find out more please visit treasurytoday.com/adam-smith-awards

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