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Uruguay’s Estancias del Lago to get $65 million IDB loan to boost powdered milk exports

State-of-the-art dairy operation to boost local employment, promote efficient use of natural resources

The Inter-American Development Bank (IDB), approved a loan of up to $65 million for Estancias del Lago S.A., a Uruguayan privately-held agri-business company, to develop a fully-integrated and highly efficient dairy operation to export powered milk.

The loan will help finance the implementation of a highly-efficient free-stall dairy facility and a dry lot facility for 8,800 and 2,000 milking cows, respectively, as well as a powdered milk plant with an annual output capacity of 16,500 metric tons, which will represent about 12 percent of the country’s current powdered milk exports. Located in the Department of Durazno, the project is expected to create as many as 400 jobs during its construction phase and another 314 once fully operational.

“The project will allow Uruguay to significantly boost exports of powdered milk by 2016 while having an important demonstration effect for the local dairy industry by adopting a large-scale free stall production model to promote the more efficient use of land, energy and water when compared with traditional, pasture-intensive farming,’’ said Martin Duhart, project team leader at the IDB’s Structured and Corporate Finance Department.

The company also received technical assistance from the IDB to incorporate innovative and sustainable agricultural and dairy practices. The company will use bio-digesters to process cattle manure and capture methane gas that will be used to produce energy for the powdered milk plant. The cattle manure will also be used as organic fertilizer for the planting of grains that will be used for feed and biofuel production. As a result, proceeds from the IDB loan will also finance the construction of an effluent plant, a fertilizer production plant and a grain milling and oil extraction plant.

Nuevo Manantial S.A. is Estancias del Lago major shareholder and the sponsor for the project, which has a total cost of approximately $226 million.

About the IDB's Structured and Corporate Finance Department

The Structured and Corporate Finance Department (SCF) leads all IDB's non-sovereign guaranteed operations for large-scale projects, as well as those linked to companies and financial institutions. Through its Loan Syndication Program, SCF acts as a catalyst, helping to engage third-party resources by partnering with commercial banks, institutional investors, co-guarantors and other co-lenders for projects with high developmental impact.