Loan of $94.7 million supports the industrialization and competitiveness of Paraguay’s agribusiness sector
The Inter-American Development Bank (IDB) signed a $94.7 million loan to support the industrialization of Paraguay’s soybean complex through financing of CAIASA, a new soybean crushing plant, which will be the largest in country.
Currently, Paraguay is the sixth largest producer of soybeans in the world, with production representing approximately 42 percent of the country’s exports. Traditionally, Paraguay has exported its raw soybeans to Argentina for crushing, thereby foregoing the production of higher-value soybean by-products such as soybean meal, oil and hulls.
Caiasa will industrialize raw material (soybeans) currently exported for crushing; increase the value added of the soybean and the country’s crushing capacity by approximately 40 percent; create direct and indirect jobs, and reduce CO2 emissions by 96,567 tons annually through the use of a boiler fed by biomass to produce thermo power.
The adoption of state-of-the-art technology will improve the project’s energy efficiency, reliability and product quality, while mitigating environmental and social impacts according to international best practice.
Soybean production in Paraguay has been steadily growing for the last decade. The crop is now the country’s largest in terms of export value, followed by meat products and corn. Through CAIASA, Paraguay will be able to capture more value from the soybean production chain, export a higher-value product and capture the associated higher revenues and support the competitiveness of the country’s agribusiness sector.
The IDB’s participation allowed the project to obtain long-term financing with a tenor and a grace period not available from commercial financing sources and helped to attract a co-lender, the OPEC Fund for International Development, which is providing a $15 million loan.
The project is aligned with the Bank's Country Strategy with Paraguay, which calls for support to the competitiveness of the agribusiness sector.