European Investment Bank loans €435M to Stora Enso for circular personal care packaging
15 Jul 2024 --- The European Investment Bank (EIB) extends €435 million (US$474 million) funding to Stora Enso, supporting its transition to circular and recyclable packaging solutions for the food and personal care sectors.
The forestry company says it will upgrade its Oulu site in Northern Finland with a specialized focus on circular and recyclable fiber-based packaging. Stora Enso previously invested €1 billion (US$1.1 billion) in the site.
According to the EIB, the company’s project is harmonious with EU initiatives to reduce plastic pollution and foster sustainable growth.
Fiber replacing plastic
Stora Enso’s plan to offer an environmentally friendly substitute for conventional plastic packaging includes the upgrade of its Oulu plant as a key element. With the help of the new production line, the company says it will offer packaging solutions made from renewable resources worldwide.
“This loan is a major step toward a plastic-free world, with an economy based on innovation and built on a green, carbon-neutral, sustainable and circular model,” says EIB VP Thomas Östros.
“Solutions offered by Stora Enso prove that the green economy is fully capable of creating growth, development and jobs.”
Plastic waste is a major source of pollution that affects soil, oceans and rivers worldwide. EIB believes that fiber-based products are made to lessen the environmental impact of plastic waste.
“This new loan with EIB will not only provide us with financial flexibility, but it also underscores our commitment to sustainable, profitable growth,” adds Kaarlo Höysniemi, senior VP of Group Treasury at Stora Enso. “Securing access to long-term capital from a variety of sources is a pivotal element of our strategy, as it enables us to invest in new growth opportunities.”
Stora Enso is touted as one of the largest private forest owners globally and employs approximately 20,000 people, with sales reaching €9.4 billion (US$10.2 billion) in 2023.
Behind EIB’s investment
The EIB loan aims to boost Northern Finland’s economic vitality in addition to supporting environmental goals by bringing competitiveness to the EU industry, fostering economic growth and creating development opportunities in the region.
EIB expects the project to contribute to key EU initiatives, including the European Green Deal, the bioeconomy strategy and the circular economy action plan.
The EIB says it finances projects that align with the Paris Climate Accord. In 2023, the EIB Group, which includes the European Investment Fund, signed €88 billion (US$96 billion) in new financing for over 900 projects, mobilizing approximately €320 billion (US$349 billion) in investment. These projects are designed to support 400,000 companies and 5.4 million jobs, focusing on climate change mitigation, adaptation and a healthier environment.
The EU’s objectives of attaining climate neutrality and strengthening social and territorial cohesion are supported by funding from the EIB. About half of the EIB’s financing in the EU is directed toward cohesion regions for inclusive growth and convergence of living standards.
