Project description
and objectives:
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The project objective is to provide additional capital for investment and
operations and to broaden the client’s access to commercial lenders and to
restructure the existing exposure.
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The revolving loan will be used for working capital needs for the increased
production volume
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The term loan is to finance capital investments needed to improve cost and
energy efficiency and quality control for the higher value added products and
for restructuring the existing debt.
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Transition impact:
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One of the key sources of transition impact potential associated with this
Project is the demonstration effect associated with
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first expected sale of carbon credits by an industrial steel company in
Ukraine. By supporting this Project, the Bank will play a key role in helping
the government in developing the market frameworks and institutions that would
allow the Company to monetise the value of its emission trading reductions.
The potential transition impact of this project is further enhanced by
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setting standards of business and environmental conduct. The Company will
develop and implement a medium-term environmental action plan (EAP) to fully
meet EU environmental standards.
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The client:
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Mini Steel Mill ISTIL (Ukraine), a closed joint stock company, is the only
stand alone modern mini steel mill in Ukraine based on electric arc furnace
(EAF) and continuous casting technology. The company produces steel products,
such as rolled and cast billets and special quality bars that are sold to
rolling mills, seamless pipe manufacturers, engineering plants, distributors
and stockists worldwide. ISTIL (Ukraine) has been an existing Bank client
since the first working capital facility provided in 2001.
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EBRD finance:
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EBRD proposes a USD 85 million facility which is planned to be syndicated to
commercial banks. The facility will consist of a USD 40 million working
capital revolving loan and a USD 45 million term loan.
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Total project cost:
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USD 228 million.
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Environmental impact:
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The project is categorised as B/1 requiring an environmental audit and
analysis. This will provide recommendations in form of an Environmental
Action Plan (EAP) to bring the plant into compliance with EU Integrated
Pollution Prevention and Control standards for environment, health and safety
in steel making. The adoption and implementation of the EAP will be
covenanted in the Loan Agreement and the Bank will monitor the progress of the
implementation.
The planned investment will have significant environmental benefits using new
technology and replacing old inefficient and polluting equipment. The
investment programme will also enable substantial energy efficiency gains to
be found and an opportunity for Green House Gases (GHG) emission reductions.
The expected GHG reduction until 2012 is estimated at 300,000 tonne of CO2,
which is equal to the annual emissions from 120,000 average EU households.
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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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Yuriy Ryzhenkov CFO, + 38 062 385 0440
Email: ryzhenkov@istil.com.ua
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EBRD contact:
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Anna Tokarz, Operation Leader: tokarza@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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