Brazil has the seventh largest economy in the
world, but economic productivity and
prosperity vary widely throughout the country.1
Pernambuco State in northeast Brazil is one of
the most marginalized regions, with a poverty
rate that is double the national average.2
Almost 90% of Brazil’s sugarcane production
occurs in its south-central region, but in 1958 a sugar producer commenced
milling sugar in Pernambuco, and today it manages one of the most modern
mills in the state.
In 2009, this sugar producer began receiving financing from the Brazilian
representatives of TriLinc Global Impact Fund’s sub-advisor. Building on
this relationship, and with a deep appreciation for the outsized social and
economic impact of the borrower, TriLinc extended a loan to the borrower in
2013 to support crop cultivation and improve its milling operations.
The borrower’s activities generate stable employment for workers at wages
that are higher than Pernambuco’s average local wage - which is among
Brazil’s lowest.3 In addition to creating much-needed jobs, the borrower
provides health, safety and specialization training to all employees. It also
offers more than 250 rent-free houses and free on-site medical services
to employees and their families. The borrower is equally committed to
the broader community where it operates. It pays the rent and building
maintenance costs for a local school and contributes to a nonprofit
organization that offers health care to the community of Pernambuco.
The borrower actively engages in minimizing its environmental impact.
Sugarcane processing byproducts include ethanol, a clean-burning, renewable
fuel, and bagasse, a fibrous waste. The company uses the bagasse to generate
electricity, with the capacity to create 40,000 megawatts per year. In addition,
the borrower collaborates with IBAMA (Brazilian Institute of Environment
and Natural Resources) to reforest the region and has planted 19.83 hectares
(the equivalent of 49 acres) of trees to date.