The International Finance Corporation (IFC), a member of the World Bank Group, has announced a financing package for Arboreal, a Uruguayan company that transforms wood sourced from responsibly managed forests into high-value industrial and construction products. With additional capital mobilized from ILX Fund, this investment will help Arboreal expand its production capacity, strengthen local technical know-how and skills to scale its business, and meet growing regional demand for renewable construction materials with a lower environmental footprint.

Globally, demand for more sustainable construction materials is growing rapidly, driven by stricter standards and increasingly ambitious climate commitments, as the sector accounts for nearly 37% of global carbon emissions. In this context, wood-based construction solutions are gaining ground, as they enable the use of engineered wood for key structural elements, such as beams, columns, and panels, including in mid- and high-rise buildings, with a significantly lower carbon footprint.

IFC’s financing package to Arboreal totals US$40 million, including a US$20 million investment from IFC’s own account and an additional US$20 million mobilized from ILX Fund. The financing will support the production of thermally modified wood, strengthen circular economy practices through solutions such as biomass briquettes, promoting a more efficient use of by-products throughout the production process, and enable various additional improvements at the processing plant.

“At IFC, we are strongly committed to supporting industrial solutions that maximize the value of renewable resources, drive local development, create quality jobs, and contribute to the decarbonization of multiple value chains,” said Manuel Reyes Retana, IFC Division Director for Argentina, Brazil, Paraguay and Uruguay. “Arboreal shows how responsibly managed forest resources can be transformed into high value-added solutions with strong development impact.”

The project uses wood from certified sources. Arboreal holds FSC® certification (license FSC C134237), which ensures traceability of the wood throughout the process, from the forest to the final product, ensuring that it is sourced from sustainably managed forests, including biodiversity conservation.

“This transaction shows how private capital can support nature‑positive and climate‑aligned industrial growth in emerging markets,” said Manfred Schepers, CEO of ILX. “We are very pleased to partner with IFC on this investment, which demonstrates how disciplined sourcing, credible certification, and innovative material choices can deliver tangible climate benefits while strengthening local value chains and industrial capacity in Uruguay.”

In addition to financing, IFC will provide strategic advisory services to support the development of the regional market for sustainable construction solutions, including demand analysis, regulatory frameworks, and building standards to help scale adoption across Latin America.

“This investment marks a major milestone for Arboreal. It will allow us to expand our industrial capacity in Uruguay, develop higher value-added wood solutions, and strengthen our ability to meet growing demand for more sustainable materials and construction systems in Uruguay, our region, and globally. We greatly value IFC’s trust and support as we continue building an industrial platform based on innovation, quality jobs, and the responsible use of renewable resources,” said Matías Abergo, President and Co-founder of Arboreal.

The project will be implemented between 2026 and 2028 and will contribute to local job creation across the forestry-industrial value chain, including a 15% increase in direct employment and the creation of around 185 additional temporary and indirect jobs in areas such as transport, logistics, maintenance, and harvesting. Overall, it is expected to strengthen local value chains, build technical capabilities, and support economic diversification.

About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2025, IFC committed a record $71.7 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet. For more information, visit www.ifc.org.

Stay Connected with IFC on social media.

About Arboreal
Founded in 2021 and based in Tacuarembó, northern Uruguay, Arboreal is an Uruguayan company that transforms wood sourced from responsibly managed forests into higher value-added materials for construction and other industrial uses. Its portfolio includes visual grade lumber, structural timber, and engineered wood solutions such as mass timber. Through its products, Arboreal contributes to lower-emission construction and more sustainable value chains.

About ILX
ILX Management B.V. (ILX) is an Amsterdam‑based asset manager specialising in private debt investments across Emerging Markets and Developing Economies. ILX mobilises long‑term pension capital by investing in loan participations originated by the Multilateral Development Banks and leading Development Finance Institutions. ILX focuses on SDG and climate‑aligned investments across four priority sectors: energy access and clean energy, sustainable industry and infrastructure, inclusive finance, and food security. The ILX Funds are backed by leading European pension investors and provide a scalable private debt strategy designed to deliver attractive risk‑adjusted returns alongside measurable development and climate impact. Read more information here: ILX Fund - SDG-Focused Emerging Market Private Debt

Source:  ifc.org