Project description
and objectives:
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The Bank’s loan of US$ 100 million replaces a short-term loan to LNM Holdings B.V., which was signed in October 2001. The project aims to support the restructuring, which will transform the company into an internationally competitive steel-maker. The loan proceeds will be used towards financing the expenditure programme as agreed between the Mittal Steel Group and the Romanian government at privatization. This includes environmental and efficiency improvements, as well as working capital.
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Transition impact:
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The privatization of Sidex was one of the largest and most important in Romania. A successful turn around programme at the company will have strong demonstration effects, providing a model for other large state-owned companies that are undertaking privatization.
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The client:
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The borrower is Mittal Steel Holdings B.V. (formerly LNM Holdings B.V.), a holding company belonging to the Arcelor Mittal (formerly LNM Group) and affiliate of ArcelorMittal Galati. ArcelorMittal Galati is the largest Romanian steel plant, located in Galati in eastern Romania.
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EBRD finance:
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Replacing the existing short-term loan from the EBRD in the amount of US$ 100 million (EUR 100 million equivalent) with a long-term loan for the same amount. The Bank has syndicated a portion of the loan after satisfactory progress of the turn around programme at Ispat-Sidex has been demonstrated.
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Total project cost:
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US$ 451 million (EUR 451 million equivalent) of which the EBRD financed US$ 100 million (EUR 100 million equivalent).
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Environmental impact:
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The project was screened B/1.
Substantial environmental due diligence was conducted on the Company and an Environmental Action Plan (EAP) has been implemented to bring the facility into compliance with Romanian standards, applicable at the time of the signing. By the end of 2006, due to some unexpected delays in procurement, out of the agreed 54 action items 13 were still outstanding. These were implemented by April 2008 with the exception of one; the installation of air emission controlling equipment in the converter shop will be completed by the end of 2008.
In 2006, in line with the EU accession process, a major study has been completed on Mittal Steel Galati and a plan was developed to bring its facilities into compliance with EU Integrated Pollution Prevention and Control (IPPC) Directive which added a further 288 action items to the EAP. This new EAP is due to be fully implemented by the end of 2014. ArcelorMittal Galati (as they are called after a merger took place in 2007) pledged to implement the programme 6 months ahead of schedule.
Air emissions will be reduced by 30% between 2007 and 2009, another 25% by 2012 and further 20% by 2015. The two settling ponds (Catusa & Malina) will be cleaned up and a closed circuit water management system will be implemented by 2014. Solid waste recycling has already reached 94% in 2007. Future plans include gradually reprocessing the existing slag heaps for secondary raw materials.
Galati’s Health and Safety Management became a model within the Arcelor Mittal group; however, the company is planning to implement further improvements in the future. Further opportunities are investigated in the field of energy efficiency improvements. In 2007 the management of AMG has developed and started to implement a new proactive public information programme in order to improve its communication and involvement with its stakeholders.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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Mrs A.Toader
1 Smardan Street
6200 Galati
Romania
Fax: +40 (236) 803228
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EBRD contact:
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Mihail Scvortov, Operation Leader: scvortom@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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