According to a World Bank press release obtained by Café y Negocios, this investment will allow the Tacuarembó-based company to “expand its production capacity, strengthen its technical knowledge and local capabilities to scale its business , and respond to the growing regional demand for renewable construction materials with a lower environmental footprint.”
The Uruguayan company, founded in 2021, transforms wood from responsibly managed forests into high-value-added industrial and construction products.
“This investment represents a very important step 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 the growing demand for more sustainable construction materials and systems in Uruguay, the region, and the world,” said Arboreal co-founder and president, Matías Abergo.
The project, to be implemented between 2026 and 2028, is expected to contribute to local job creation throughout the forestry-industrial value chain, with a 15% increase in direct employment and the creation of approximately 185 additional jobs, including temporary and indirect positions, in activities such as transportation, logistics, maintenance, and harvesting.
Funding and objectives
IFC’s financing package for Arboreal totals US$40 million , and includes a US$20 million loan on its own account and an additional US$20 million loan mobilized by ILX Fund, an Amsterdam-based asset manager specializing in private debt investments in emerging markets.
This financing aims to support the production of thermally modified wood, which will strengthen circular economy practices through solutions such as biomass briquettes, allowing the use of by-products throughout the production process and enabling improvements in the processing plant.
Arboreal works with certified wood, ensuring its origin throughout the entire process. “This transaction is a clear example of how private capital can support industrial growth aligned with climate goals in emerging markets,” said Manfred Schepers, CEO of ILX.
For his part, Manuel Reyes Retana, IFC’s Division Director for Argentina, Brazil, Paraguay, and Uruguay, affirmed that the organization maintains “a strong commitment to developing industrial solutions that maximize the value of renewable resources, drive local development, create quality employment, and contribute to the decarbonization of multiple value chains.”
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 construction standards that facilitate their adoption in Latin America.
The trend toward construction solutions focused on wood is also noteworthy.
Globally, demand for more sustainable building materials is growing, driven by more demanding standards and increasingly ambitious climate commitments.
In a context where the traditional construction sector generates approximately 37% of global carbon emissions, wood-based construction solutions are gaining ground, as they allow the use of engineered wood for key structural elements, such as beams, columns, and panels, even in medium- and high-rise buildings, with a significantly smaller carbon footprint.
What does Arboreal produce?
Arboreal, a company founded in 2021, transforms wood from responsibly managed sources into higher-value materials for construction and other industrial uses. Its portfolio includes structural timber, sawn lumber, and wood solutions such as mass timber.
