NIB funds pulp mill expansion in Sweden

Södra Cell Värö pulp mill. Photo: Södra Skogsägarna Economic Association.

NIB and Södra, a Swedish economic association of forest owners, have signed a SEK 1 billion (EUR 109 million) loan to finance the expansion of the Södra Cell pulp mill in Värö, South West Sweden. The loan has a tenor of ten years.

Södra Group’s Värö pulp mill currently produces 425,000 tonnes of softwood pulp annually. The Group has made a decision to invest in expansion of the current Värö mill, which would enable it to increase its pulp production capacity to 700,000 tonnes annually. The expansion will make the Värö pulp mill one of the biggest producers of softwood pulp globally.

The expansion will also improve the Värö mill’s energy efficiency. The increased production will supply more renewable electricity to the grid, more renewable heat to local communities as well as more biofuels to the markets. Already now under normal operation situations, the mill does not utilise fossil fuels. The investment will now assist also the surrounding community to become less dependent on fossil fuels.

The majority (98%) of the wood used in the pulp mill originates from the southern parts of Sweden and is supplied from Södra’s own forest owners.

“The expansion of the Värö pulp mill will not only strengthen the Södra Group’s market position, it will also benefit the whole Nordic forestry industry cluster. Designing, engineering, manufacturing and running forest industry mills require a wide range of top-notch expertise and employ a significant amount of people directly or indirectly. Investments in capacity expansion are therefore crucial to maintain the forestry sector’s competence in NIB’s member states”, says Henrik Normann, NIB President & CEO.

The construction work on the extension began in September 2014, and the mill is expected to be fully operational in autumn 2016.

Södra was founded in 1938 and is the largest forest-owner association in Sweden, with a membership of more than 50,000 forest owners. Södra is also an international forest industry group that employs 3,500 people and is one of the leading European suppliers of pulp for the global market.

NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.

For further information, please contact

Mr Kim Krokfors, Senior Manager Origination, at +358 10 618 0517,

Ms Niina Rantti, Communications Officer, at +358 10 618 0265,