Paraguay’s banking sector has spent recent years presenting itself as a responsible partner in the fight against climate change and environmental destruction. Major lenders have publicly committed to sustainability principles, pledged to avoid financing illegal deforestation, and joined initiatives aimed at protecting one of South America’s most threatened ecosystems. Yet newly revealed loan documents tell a far more troubling story-one that exposes a stark gap between public rhetoric and private practice.

According to documents obtained by the Organized Crime and Corruption Reporting Project (OCCRP) and the Dutch newspaper Het Financieele Dagblad, two prominent Paraguayan banks, Sudameris and Banco Continental, extended tens of millions of dollars in loans to companies owned by Brazilian agribusinessman Ulisses Rodrigues Teixeira. This is despite Teixeira’s documented history of environmental violations in eastern Paraguay, including crimes linked to the destruction of thousands of hectares of protected forest.

In total, the two banks loaned approximately $36 million to Teixeira’s companies in recent years, even after he admitted guilt in a 2022 plea deal related to environmental crimes. The revelations raise serious questions about the credibility of sustainability pledges made by financial institutions in Paraguay and highlight the role banks can play in enabling environmentally destructive business models.

Ulisses Rodrigues Teixeira is a Brazilian national with extensive agribusiness interests in Paraguay, particularly in the country’s eastern region. In 2022, Teixeira entered into a plea agreement with Paraguayan authorities, admitting guilt in connection with environmental crimes tied to a massive fire that occurred in 2012. The blaze destroyed 7,477 hectares of natural forest on protected land owned by one of his companies.

While Teixeira denied deliberately setting the fire, he acknowledged failing to establish a legally required fire prevention and management plan. As part of the plea deal, he agreed to compensate affected communities by donating funds to local schools and hospitals. The agreement effectively closed the case without prison time, but it formally established his responsibility for serious environmental harm in one of Paraguay’s most sensitive ecological zones.

That zone-the Upper Paraná Atlantic Forest biome-is one of the most biodiverse regions in South America. It is home to jaguars, woolly spider monkeys, red-tailed parrots, and dozens of other vulnerable or endangered species. The forest also sustains the livelihoods of more than 400 Indigenous communities. Over recent decades, however, industrial cattle ranching and soybean cultivation have devastated much of this ecosystem, prompting Paraguay to adopt a so-called “zero-deforestation” law in 2004 that bans the clearing of native forest in the eastern part of the country.

Despite this legal framework, enforcement has been weak, and Teixeira’s case illustrates how environmental protections can be undermined not only by landowners, but also by financial institutions willing to look the other way.

Sudameris and Banco Continental are not obscure lenders operating on the margins of Paraguay’s financial system. Both institutions have publicly aligned themselves with sustainability initiatives and are founding members of a sustainable finance roundtable created to establish environmental protection standards for the country’s banking sector. Both have pledged to avoid financing projects that contribute to illegal deforestation or the destruction of high-conservation-value areas.

Yet mortgage and loan documents reveal that Sudameris and Banco Continental repeatedly financed Teixeira’s companies, using protected land in eastern Paraguay as collateral.

Sudameris’s relationship with Teixeira dates back to 2008, when it first extended a loan to Lapacho Itanara S.A., one of his companies. That loan was secured by the Lapacho Itanara ranch, located in Paraguay’s protected eastern region. Satellite imagery suggests the land had already been cleared by a previous owner, and it has since been developed for agriculture. Over the years, Sudameris continued to lend to the company, ultimately providing a total of $42.5 million between 2008 and 2024.

Most strikingly, Sudameris approved an additional $15 million loan after Teixeira admitted guilt in his 2022 plea deal. While the bank maintains that it screens clients for court rulings and has internal environmental credit checks, it declined to explain why it continued financing a businessman who had formally acknowledged responsibility for environmental crimes.

Banco Continental followed a similar path. In 2024, the bank issued a $21 million mortgage loan to Paso Kurusu S.A., another company owned by Teixeira. The loan was secured by land located in the same region where the devastating 2012 fire occurred. That land is now leased to a private firm for soybean and corn cultivation-industries closely associated with deforestation across South America.

Both banks refused to comment on the specific purpose of the loans, citing confidentiality or potential legal concerns.

The 2012 fire was not an isolated incident. Paraguay’s National Forest Institute (INFONA) has monitored land owned by Teixeira’s companies for years and documented a range of environmental violations. According to INFONA, Teixeira’s firms have been fined a total of 808.5 million guaraníes-approximately $129,000-for offenses including deforestation, illegal soil extraction, obstructing natural waterways, and unlawfully filling wetlands. The earliest recorded infraction dates back to 2019.

In 2021, one of Teixeira’s companies, Rio Verde S.A., acquired a property known as El Ciervo, which was also protected under the zero-deforestation law. Inspectors later reported evidence of more recent environmental damage on the land, including the clearing of around 178 hectares of forest, sand extraction, and wetland filling. These findings were referred to prosecutors, and an investigation was opened. However, the case was ultimately dismissed after the statute of limitations expired.

INFONA President Cristina Goralewski has acknowledged the limitations of her agency’s authority. While INFONA can impose administrative fines, criminal enforcement depends on prosecutors, and many cases stall or disappear within the judicial system.

“By law, we can impose administrative sanctions-and we do-but that’s all,” Goralewski said, underscoring a broader culture of impunity that allows environmentally harmful actors to continue operating with minimal consequences.

The revelations have prompted renewed calls for Paraguayan banks to take environmental risk more seriously. Alfredo Molinas, Paraguay’s former environment and sustainable development minister, argued that lenders should categorically refuse to finance individuals or companies linked to environmental crimes.

“Banks should not grant financing to any person or company that has admitted some kind of environmental crime or that is linked to illegal deforestation,” Molinas said. “And if they did that, that credit must be cut off.”

Environmental groups echoed this sentiment. Rodrigo Zárate, a coordinator at the NGO Guyra Paraguay, emphasized that banks are not passive actors in environmental destruction.

“Financial institutions should have strict environmental safeguards to prevent their funds from ending up financing people with a history of illegal deforestation,” he said. “Banks should be rigorous in their monitoring and in their evaluations.”

Sudameris responded by highlighting its internal standards and cooperation with international development banks, noting that non-compliant clients “can eventually be exited.” Banco Continental declined to comment on matters that might involve legal or regulatory proceedings.

The case of Ulisses Rodrigues Teixeira exposes a deeper contradiction at the heart of sustainable finance in Paraguay and beyond. While banks increasingly adopt the language of environmental responsibility, their lending decisions often tell a different story. As long as financing continues to flow to agribusinesses with histories of environmental harm-especially in biodiversity hotspots like the Upper Paraná Atlantic Forest-sustainability pledges risk becoming little more than public relations exercises.

In a country where enforcement of environmental law is already fragile, the role of banks is especially critical. By choosing whom to finance, they can either reinforce destructive economic models or help steer capital toward genuinely sustainable development. The evidence revealed in this case suggests that, for now, Paraguay’s green banking commitments remain dangerously shallow.

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Source: Weekly Blitz :: Writings