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EIB signs Euro 200 million loan agreement with Metsä Fibre for its investment in Kemi bioproduct mill in Northern Finland

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EIB signs Euro 200 million loan agreement with Metsä Fibre for its investment in Kemi bioproduct mill in Northern Finland

February 11, 2021 - 11:58
Posted in:
    LUXEMBOURG, Feb. 11, 2021 (Press Release) -
  • EIB signs €200 million loan with Metsä Fibre Oy, to support part of its investment in a new bioproduct mill in Finland, with higher production capacity and environmental standards.
  • The new energy self-sufficient bioproduct mill in Kemi will produce some 1.5 million tonnes of softwood and hardwood pulp per year, as well as many other bioproducts.
  • The energy self-sufficient mill will produce 2.0 TWh of renewable electricity per year (roughly 2,5% of Finnish electricity production), excess electricity is sold to national and local grids.

The European Investment Bank has signed a €200 million loan agreement with Metsä Fibre Oy, a part of Metsä Group, for its investment in the Kemi bioproduct mill in Northern Finland. The financing will support a €1.6 billion investment, which will increase the production volume of pulp and other bioproducts at the Kemi site through state of the art technology. Metsä Fibre has previously invested in a similar bioproduct mill in Äänekoski, Finland, which was also supported by the EIB under the Investment Plan for Europe.

The EIB-supported parts of the larger project concern the generation of renewable energy during the production process, as well as the environmental protection parts of the works. The mill will produce 2.0 TWh of renewable electricity per year, equal to roughly 2,5% of total Finnish electricity production. The energy self-sufficiency of the mill is high and the excess electricity will be sold to national and local grids, making the operation fully in line with both Metsä Group’s and the EIB Group’s climate ambitions.

EIB Vice-President Thomas Östros stated: “We’re glad that companies like Metsä Group are on the forefront of converting production processes to more environmentally friendly standards, producing renewable energy along the way. The EIB, as the EU’s climate bank, sees projects like this one as a signal of a changing business environment, which we hope will prompt other sectors to review their processes as well. The EIB and Metsä Group have a longstanding cooperation, and we’re glad to continue our support with this important project.”

Metsä Group CFO, Vesa-Pekka Takala, said: Demand for sustainably produced pulp is growing globally. Finnish wood is the world's best renewable raw material. Kemi's new fossil-free bioproduct plant is the number one in the world in terms of environmental, energy and material efficiency. It is important that the financing package for the project is strong and comprehensive. EIB's long-term financing is an important element in the implementation of the investment.

The parts of the project financed with the EIB loan concern environmental performance and renewable energy generation (e.g. new recovery boiler and installation of a new condensing steam turbine). The mill will produce renewable energy from biomass with high self-sufficiency, meaning that excess green energy will be exported to the national grid. No fossil fuels will be needed in the production process, and renewable energy in the form of electricity, wood based fuels and heat will be sold to external customers.

Background information:

Metsä Group is a forerunner in sustainable bioeconomy utilising renewable wood from sustainably managed northern forests. Metsä Group focuses on wood supply and forest services, wood products, pulp, fresh fibre paperboards and tissue and greaseproof papers. Metsä Group’s annual sales is approximately EUR 5.5 billion, and it employs roughly 9,200 people. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 100,000 Finnish forest owners.