The client:
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ISD, AMK and affiliates. ISD is the largest producer of steel in Ukraine. ISD's steel business in Ukraine comprises two major steelworks, Alchevsk Iron and Steel Works (AMK), and Dniprovsky Iron and Steelworks (DMK). ISD also owns ACW, Dunaferr, a Hungarian steel producer, and Huta Częstochowa in Poland.
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Environmental impact:
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The Project was screened A/0 and required an update of the existing Environmental and Social Impact Assessment (ESIA) for the original Combined Cycle Gas Turbine (CCGT) Project approved in 2006.
The EIA undertaken by independent consultants has shown a net positive impact of the Project. The environmental due diligence did not identify any significant material issues associated with the Project and confirmed that it has been structured in accordance with national and EU environmental standards. The new CCGT plant will be located adjacent to the existing steel plant and it will utilise process off-gases from the coke ovens, converters, and blast furnaces. Natural gas will not be required for routine operation of the CCGT plant. The plant will utilize waste gases, which otherwise would have to be flared, thereby reducing the environmental impact of the plant. The new power plant will be using state-of-the-art pollution control technology and meet all the relevant EU and Ukrainian emission, notably as specified by the EU Large Combustion Plant Directive. An environmental management system and continuous monitoring will be incorporated into day-to-day operations of the CCGT plant.
The new CCGT unit will utilise waste gases from the coke ovens, converters, and blast furnaces which otherwise would have to be flared, thereby reducing the environmental impact of the plant. The Project will improve the efficiency and reduce the environmental impact of the steel plant, notably in terms of emission of carbon dioxide. The Project will cumulatively generate on average 3,165 GWh of electricity per annum (on a net basis) of which incremental 1,055 GWh by the third unit using exclusively recovery gases from steelmaking works. The amount of electricity generated will fully cover electricity demand following modernisation and expansion of capacity of steel operations. Excess electricity generated will be supplied to the grid. The project is expected to lead to a significant reduction of emissions of GHG by eliminating use of electricity from the grid. The carbon emission factor of the Ukrainian electricity grid is rather high due to the fuel mix and operating characteristics. Overall, after installation of the third CCGT, green house gas (GHG) emissions are anticipated to be reduced by more than 2.8 million tonnes CO2 equivalent per annum. This would be equivalent to the annual carbon emissions from households of a city of 1.1 million in Britain.
A sanitary zone is required to be created around the plant. A Resettlement Action Plan (RAP) has been developed for the required resettlement associated with the original two turbine version of the project. This RAP has also been updated taking into account the third turbine. AMK has undertaken a public consultation and disclosure programme, in compliance with national and EBRD requirements. The public consultation process undertaken to date did not result in any negative responses. The updated ESIA and RAP were published locally and on the Bank's web site on 13th of March as part of consultation according to the Bank's policy.
Legal documents include that the Borrower will need to carry out the project in accordance with Ukrainian law and EU environmental standards, to provide annual environmental, health and safety report, and to notify the Bank on material issues and accidents and compliance with Core Labour Standards. Monitoring visits by Bank staff or appointed representative will need to be allowed during the construction and operation periods, if deemed necessary.
There is an Environmental Impact Assesment available for this project.
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