United States Position

Proposed IFC Investment in Portucel Mozambique

December 11, 2014

The United States would like to thank staff for the extensive bilateral discussions on the 

proposed investment in Portucel Mozambique. The United States appreciates that this is an 

investment in an undeveloped sector with substantial potential development impact and 

economic diversification objectives.

The United States recognizes that the IFC equity investment would support the pilot phase of an 

industrial-scale monoculture plantation project designed to be integrated with support for 

transitioning farmers to commercial agricultural production, and would be the largest foreign 

investment in Mozambique outside its mining and infrastructure sector. 

The United States also appreciates that the proposed investment during its pilot phase would 

generate a number of local jobs and, if accompanied by a successful community development 

program, could benefit those impacted by the project. The United States recognizes that the 

project would bring additional infrastructure investments in roads and port facilities.

However, the United States is concerned about the environmental and social impacts of this 

project and believes the Environmental Impact Assessment should better address the project’s 

risks, as well as the impact of additional infrastructure and operations needed to implement the 

project—for example, the roads, pulp mill, power plant, and port developments. 

 

The United States is concerned about the impact on water, including possible conflicts over 

resource usage, as well as the impact on wildlife and forests. The United States encourages IFC 

to strengthen the process of identifying areas for exclusion by including an independent expert 

review of areas designated for clearing. 

The United States notes that the IFC has established ambitious requirements before Portucel can 

acquire land rights for plantation activities in targeted areas. In this context, the United States

would like to see the IFC focus on land acquisition requirements during project implementation 

and close supervision of all elements of the project by independent monitors, given the large 

number of people who may be impacted. Project supervision will be critical going forward. We 

also hope that given past challenges in the sector that the IFC will rely on and incorporate 

lessons they have previously learned.

The United States appreciates that the World Bank Group and others may complement this 

investment, and integrate it into the Bank's broader agri-forestry strategy for Mozambique. The 

United States supports this type of comprehensive approach.

The United States would further note that environmental documentation for Category A projects 

should be made public as early as possible – ideally, 120 days ahead of Board decisions. In light 

of these issues, the U.S. would like to be recorded as abstaining on this project on environmental 

policy grounds. 
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contents may not otherwise be disclosed without World Bank Group authorization.