[China Co-financing Fund] IDB Invest approves loan from CHC for Fitesa expansion in Brazil (link to Record ID#85015)

[China Co-financing Fund] IDB Invest approves loan from CHC for Fitesa expansion in Brazil On June 6, 2017, a loan of US$64,750,000 was approved by the Inter-American Investment Corporation (IIC, now IDB Invest, the private sector arm of the Inter-American Development Bank Group) to Fitesa S.A.

This loan was comprised of two sources of funding: US$20,000,000 from the China Co-financing Fund for Latin America and the Caribbean and US$44,750,000 from the IDB Group's own resources.

However, IDB Invest does not provide a date on which the loan contract was signed, and lists the project status as inactive.

The loan was to be divided into two tranches: US$37,720,000 to Fitesa Naotecidos S.A., the Fitesa subsidiary in Brazil (captured in this project) and US$27,030,000 to Fitesanonwovens Mexico S.A. de C.V., the Fitesa subsidiary in Mexico (captured in Record ID#85015). It is unclear what proportion of the 20 million USD from the China Co-Financing Fund was slated for Fitesa Naotecidos.

The total project cost is expected to be about 141 million USD.

According to IDB Invest, the loan to Fitesa Naotecidos was intended to fund "the construction of a greenfield plant and installation of a new line with a capacity of 20,000 tons/year" in Cosmópolis, São Paulo.

However, the Fitesa plant in Cosmópolis was announced in October 2014 and began operations in the beginning of 2016, according to Nonwovens Industry and Sinditextil SP.

This plant was expected to require a R$ 160 million investment and would produce about 20,000 tons of nonwovens per year.

Further, staff from the IIC visited "the new plant in Cosmopolis" on a trip lasting from January 30 to February 1, 2017.

This seems to indicate the project is not the construction of a new plant entirely, but rather the expansion of a pre-existing one, despite the "greenfield plant" language earlier in the project description. Non-woven textiles are primarily used for hygiene and medical products.

It is possible that the loan is funding "a new multibeam Reicofil 5 line to be installed in Cosmópolis," discussed in a November 2020 press release, that would enhance the plant's capacity with an additional 20,000 tons per year.

This production line was in an advanced stage of construction in November 2020 and is expected to be finished in July 2021.

However, Fitesa's press release about this expansion links it to "the investment announcement made in May [2020]." IDB Invest notes the loan will also fund studies about and, pending study results, the installation of, solar panels at the Cosmópolis and/or San José de Iturbide plants.

Insofar as (1) the project, as of August 2022, was listed as inactive by IDB Invest and (2) there is no evidence linking this loan to any of the similar expansion projects undertaken by Fitesa since the approval date, it seems likely the project was cancelled before a loan contract was officially signed.

The China Co-Financing Fund was established on 14 January 2013 with a contribution of 2 billion USD by the People's Bank of China, and it is administered by the IDB. For more information, see umbrella Record ID#86526.