MercoPress. South Atlantic News Agency

“With or without IFC support”, Botnia's mill goes ahead

Finland's Botnia which is building a controversial pulp mill in Fray Bentos, Uruguay said the construction will go ahead “with or without” the support from the World Bank's International Financial Corporation.

"The pulp mill will be built with or without the IFC. We'd rather have them on board, but we also have contingency plans; we're not going to be burdened with this financial risk", said Vill Jaakonsalo, head of Botnia's Finance Department. Anyhow Mr. Jaakonsalo trusted "there's nothing to make IFC to withdraw from the undertaking, except for political reasons".

IFC is the World Bank's private sector branch and is considering contributing with a credit of 170 million US dollars for the construction of Botnia's pulp mill as well as for a second plant of Spanish origin, Ence, also in Fray Bentos.

IFC is currently involved in an environmental impact assessment report to determine whether the future pulp mills will abide with international rules regarding environment conservation.

Britain's Financial Times quotes sources of the French investment bank Calyon saying that they would abandon the project if the IFC environmental impact assessment proves to be negative.

Spanish bank BBVA that is also considering financial support for ENCE said that it's waiting for the environment assessment report to advance with the project.

Last April Holland's ING which was coordinating a loan for Botnia, withdrew following the "negative publicity" generated.

Argentina objects to the pulp mills project arguing they will contaminate water and air in the region plus damage the burgeoning tourism industry on the Argentine side of the River Uruguay which acts as a natural border between the two neighbouring countries.

Argentina also alleges that Uruguay has violated the River Uruguay treaty dating back thirty years which commits both associates to keep partners informed of any project or activity that could have an impact in the river's water.

Argentina took the case to the International Court of The Hague where it's currently under consideration by the magistrates following last week's both sides presentation. Argentina is demanding work in the pulp mills be suspended until a full, accumulative, environmental impact assessment is done.

President Nestor Kirchner administration does not take seriously the IFC report since they "have been involved all along with the project all along".

Argentina also argues Uruguay did not abide with the River Uruguay agreement rulings since they did not inform properly and on time of Uruguay's intentions with the river's water course.

The pulp mills 1.8 billion US dollars undertaking is Uruguay's largest private investment in recent times.