Project description
and objectives:
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The proposed project consists of an increase of the corporate loan to OAO
Uralkaly, a potassium salt producer located in the city of Berezniki, Perm
Region, in the Urals.
The additional funding will be provided to Uralkaly to continue further
development of the Baltic Bulk Terminal (BBT) and increase the efficiency of
its operations . The project will allow Uralkaly to enhance reliability of its
export oriented logistical chain and improve efficiency of operations at the
terminal.
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Transition impact:
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The transition impact potential derives from the demonstration effects
associated with the continued restructuring process of the Company and setting
up good corporate governance standards and business procedures at the Baltic
Bulk Terminal. Uralkaly provides a good example of the practical
implementation of the Corporate Governance Code. It has demonstrated
transparent organisational structure, financial soundness, and dedication to
further developing and maintaining corporate ethics.
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The client:
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Open joint stock company Uralkaly is Russia’s largest potassium salt
(fertiliser) producer (4.4 million tons in 2003). It contributed an estimated
11% of the world’s potash production. The Company’s other products are
magnesium sulphate (karnalite) and table salt. More than 85% of the Uralkaly’s
output is exported.
The Baltic Bulk Terminal is a joint venture project between Uralkaly and Saint
Petersburg Sea Port built in 2001 to tranship and store up to 5.5 million tons
of mineral fertilisers to international markets.
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EBRD finance:
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A 4 years senior corporate loan in the amount of up to $65 million. The Bank
aims to syndicate up to $20 million to commercial banks.
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Total project cost:
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$65 million (€54 million).
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Environmental impact:
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Uralkaly is an existing client of EBRD. A 7-year senior corporate loan in an
amount of up to $75 million was granted in December 2003 for equipment
modernisation, purchase of rolling stock and construction of its own power
plant at its potassium salt production plant, which is located in the city of
Berezniki, Perm Region, in the Urals. That project was screened B/1.
Environmental due diligence on that existing loan revealed various
environmental issues and an Environmental Action Plan is being implemented.
Environmental issues associated with Uralkaly operations at Berezniki are
related to air emissions, effluent control and water management, disposal of
tailings and site reclamation. Part of the investments financed by the first
EBRD loan to Uralkaly will result in reduction in fuel use and associated
emissions. Uralkaly has obtained ISO 14,001 certification of its
Environmental Management System in September 2003.
In the frame of this second project EBRD will provide another corporate loan
for Uralkaly to further develop the Baltic Bulk Terminal, a modern port
terminal near St Petersburg for Uralkaly’s exports. It has been classified as
C/1 requiring an environmental audit of the port facilities in order to review
whether the new terminal is in line with best international practice in
environmental, health and safety management, and is being carried out by an
independent environmental consultant. In November an independent
Environmental Audit will be conducted of the production facilities of Uralkaly
at Berezniki. Once these studies are completed, an updated PSD Annex will be
made available.
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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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Website: http://www.uralkaly.ru/
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EBRD contact:
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Eric Rasmussen, Operation Leader: rasmusse@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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