At the core of São Martinho’s strategy is a robust financial arrangement with the IFC, a globally renowned institution committed to sustainable development. The financing package, amounting to US$165m, is structured with a term secured overnight financing rate (SOFR) six months rate over a ten-year term ending in 2034. It features a three‑year grace period on principal repayments and semi-annual interest payments.

“Notably, when we secured this debt, the financing rate was set at 95% of Brazil’s reference rate (CDI), reflecting a highly competitive cost of capital,” explains Cristiane Mendes Pigatto, Financial Manager.

This financial framework not only provides the necessary capital to launch the company’s biomethane production unit at the Santa Cruz facility in Américo Brasiliense, São Paulo, but also validates the project’s potential to deliver significant environmental and economic benefits. By converting vinasse – a byproduct of its sugarcane ethanol production – into approximately 15.6m normal cubic meters of renewable natural gas during the crushing season, it is transforming waste into opportunity. This renewable gas meets the stringent standards set by the Brazilian Oil, Natural Gas, and Biofuels Agency and generates valuable decarbonisation credits, further reinforcing the company’s commitment to environmental stewardship.

Operational startup is targeted for the second half of 2025, with the unit initially operating at 40% capacity during the 2025/26 crop year and reaching full capacity by the 2026/27 crop year. Its strategic location leverages existing infrastructure, ensuring an efficient production and distribution process that minimises risks while maximising returns on investment.

What sets this funding solution apart is its focus on long-term sustainability and value creation. The IFC’s involvement brings not only the capital but also technical expertise and global best practices, reinforcing the company’s commitment to climate-smart investments that yield measurable environmental and financial returns. This strategic partnership demonstrates how innovative financing can catalyse transformative change by converting operational challenges into competitive advantages, setting new industry benchmarks.

In summary, São Martinho S.A.’s biomethane project stands as a testament to the power of innovative financing. By integrating a forward-thinking renewable energy solution with a state-of-the-art funding mechanism – characterised by competitive rates, favourable terms and robust risk mitigation – São Martinho S.A. has established a scalable blueprint for sustainable investment. This initiative is poised to redefine the role of agribusiness in the transition to a low‑carbon economy, delivering long-term value to shareholders, communities and the global environment.