Bank loan for $60 million will help increase the value added components of forestry production and improve environmental sustainability
At least 10,000 small-scale forestry producers and 1,000 micro-, small-, and medium-scale forest-based industries in Argentina will benefit from an Inter-American Development Bank (IDB) loan for $60 million to finance the Forest Sustainability and Competitiveness Program.
The program, which will be carried out in regions of the country with significant forestry potential, will help to help increase the value added of forestry production and improve environmental sustainability by fostering sustainable and competitive forest plantations, increasing product quality, diversifying the productive base, and improving the access of micro-, small- and medium-size enterprises to supply chains and markets.
"Argentina has made a significant transition in its forestry sector over the past 60 years, moving away from an industry based on the natural forest to one that relies on plantations for 85 percent of its raw material," said Sergio Ardila, IDB project team leader. “The program will help address critical problems that limit the development of productive chains by providing key public goods needed to improve the competitiveness of small- and medium-scale producers and innovators.”
The program will target regions with significant forestry potential, such as the Norte Grande (Corrientes, Misiones, Chaco, Formosa, Santiago del Estero, Salta, Jujuy, and Tucumán), the Irrigated Valleys (primarily Rio Negro, Neuquén, Chubut, Mendoza, and San Juan), and The Pampas (Córdoba, Entre Ríos, Buenos Aires, and La Pampa).
The project is expected to produce a 30,000 hectare increase in high-value specie plantations and in the production of an additional five million seedlings from nurseries.
Program components include improvements in management designed to promote investments in information and forest certification, as well as activities for technology development and transfer that include improved plantation technologies and initial processing.
The IDB loan has a 25-year term, a grace period of five-and-a-half years, and an interest rate based on LIBOR. Counterpart financing totals $14.8 million.