Norwegian pulp and paper company Norske Skog Skogn has successfully entered into a green loan agreement with DNB Bank, securing Nkr500m ($46m).
This green loan is earmarked for projects that meet stringent environmental criteria, including emission reductions from the new thermo-mechanical pulp line and the procurement of certified wood fibre.
Norske Skog CEO Geir Drangsland said: “We are pleased to raise our first green loan at Norske Skog Skogn and to progress with our work to hold a majority of our debt financing at the subsidiary level. The financing will free up operating cash flows at Skogn to be used for purposes across Norske Skog.”
The loan, which has a three-year maturity with the option to extend to four or five years upon approval from lenders, will be repaid annually at Nkr50m.
It features a floating interest rate pegged to the three-month Norwegian Interbank Offered Rate plus a margin.
The loan is expected to be disbursed during the third quarter, pending the fulfilment of certain conditions.
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By GlobalData
In a strategic move, Norske Skog has terminated an undrawn €31m revolving credit facility at the parent company level with DNB, resulting in the release of Nkr328m million in restricted cash.
The company is considering further debt financing options such as overdraft or revolving credit facilities, within the limits of existing group loan agreements.
Norske Skog also provided an update on its containerboard production at Golbey in France.
The start of production is now anticipated in the first quarter of 2025, a delay from the previously projected second half of 2024.
The commissioning of essential infrastructure, including the roll warehouse, containerboard winder, and effluent station, is currently underway.
Precommissioning activities for the OCC drum pulper have begun, with the paper machine scheduled to follow in early October.
The project has encountered delays due to extended piping and electrical cabling work, leading to an increase in the net investment amount to €320m from the previously estimated €300m.
Once operational, containerboard production at Golbey will be incorporated into the Packaging Paper accounting segment from the first quarter of 2025.
