MHP Biogas

Location:

Ukraine

Project number:

49301

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

13 Dec 2017

Status:

Signed

PSD disclosed:

27 Oct 2017

Translated version of this PSD: Ukrainian

Project Description

Construction by Myronivsky Hliboproduct ("MHP Group") of a greenfield 10 MW biogas plant in Vinnitsa region of Ukraine.

Project Objectives

The Project will support MHP Group's strategy to improve the energy efficiency and environmental footprint of its operations.

Transition Impact

The Project is expected to have a significant transition impact under the 'Green' quality as it will promote the efficient utilisation of chicken manure and other agricultural residues for energy production and the application of best available techniques related to waste management. The Project is expected to result in significant reduction in GHG emissions.

Client Information

MYRONIVSKY HLIBOPRODUCT PJSC

MHP Group is a leading vertically integrated poultry/grain/fodder producer in Ukraine.

EBRD Finance Summary

EUR 25,000,000.00

€ 25 million loan.

Total Project Cost

€ 27 million.

Environmental and Social Summary

The Project was categorised B as Project elements are site specific and readily addressed through well-understood mitigation measures. The Project was subject to an independent environmental and social due diligence (ESDD). In line with national regulatory requirements the linear infrastructure components do not require environmental impact assessment or environmental permitting and are only subject to construction permitting. To date, the EIA for the biogas complex has been completed and approved through the legally required environmental expertise process. The EIA for the CHP facility is not yet completed.  

The Project belongs to the Vinnytsia Poultry Farm Division of MHP which is accredited to ISO 9001 (quality) and ISO 22,000 (food safety) and is also working towards the certification under the Global Good Agricultural Practices system (Global G.A.P.). Within the Vinnytsia Poultry Farm Division there is the appropriate expertise for the management of key environmental, hygiene, health and safety aspects. Human resource management is undertaken in accordance with both national legal requirements and several Company-wide policies including the "Personnel Policy" and the "Protection and Safe Labour Policy". The Personnel Policy includes a number of key commitments on use of forced and child labour, non-discrimination, freedom of association and collective bargaining and wages, benefits and conditions of work).  Due diligence has confirmed these as complaint with PR2. The Company has an appropriate grievance mechanism in place.

The Project is aimed at utilising wastes from the existing poultry facilities to generate biogas to be used as an alternative energy source by using state-of-the-art technology. Therefore, the process maximizes resource use and minimizes wastes generated.  Best available techniques will be employed for the reduction and control of air emissions including a 3-stage desulphurisation process. The biogas complex water consumption is estimated to be approximately 5.155 m3/day, mainly for sanitary and associated purposes. Technological water use at the biogas complex is ensured through recirculation of 80per cent of the digestate liquid phase. The remaining 20 per cent will be discharged into a lined lagoon, located within the biogas complex site, and will then be used as fertiliser on the agricultural fields cultivated in the area by MHP. Benefits are associated with the reduction of GHG emissions through better chicken litter management, and capturing methane gas through anaerobic digestion to substitute natural gas combustion at the existing slaughterhouse in Ladyzhyn. According to the emissions calculation performed by MHP, it is expected that the Project will be associated with GHG emission reduction of approximately 85,500 tonnes of CO2 equivalent yearly.

For the biogas complex a sanitary protection zone extending 500m from the site boundaries was defined. The nearest residential house is located 1000 m from the biogas complex site boundaries and no sensitive receptors are located within 500 m radius. The regulatory SPZ requirements are therefore met for the biogas complex. The CHP facility will be located within an existing facility with SPZ defined and associated regulatory requirements met. Therefore no SPZ conflict is expected in association with the Project CHP facility. Road traffic-related risks represent an issue of community concern. This was considered by MHP and addressed by including a new access road as an additional Project component. The new road is designed to ensure that the main Project traffic will bypass communities. In spite of the bypass it is expected that Project-related road traffic will still need to use the existing road network. Provision of associated mitigation measures and related management planning are therefore included within the ESAP.

The Company has secured Project land through long-term leasing and through negotiated settlements. At the time of ESDD, agreement to utilise land plots had been obtained for all Project elements, and the majority of land use agreements had been signed. Some compensation payments were yet to be paid. The completion of these agreements and payment of compensation has been integrated as an action item within the ESAP to ensure that any construction works can proceed.

The Project site is not located in biologically and ecologically important areas, and no protected species and/or critical habitats/ecosystems will be impacted by the Project. Likewise, no cultural heritage including architectural and archaeological sites will be affected by the Project.

Formal Project information disclosure was undertaken through public hearings required under the national permitting process. This included a joint public hearing addressing the requirements of both the Detailed Territory Plan and the preliminary EIA of the Biogas Complex EIA held on 29th June 2017. Further formal information disclosure will include the public hearing of the Project CHP facility EIA. Project information disclosure provided in the frame of above indicated meetings addressed only the aspects associated with the development of the Biogas Complex facility. Overall information disclosure pertaining to all Project components (including the linear infrastructure Project elements) and associated overall impacts have not been performed to date.

An ESAP is being developed for the Project, and is anticipated to cover the following:

  • Completion of the Environmental Impact Assessment for the CHP facility and extension of the study to include consideration of the linear elements of the Project;
  • Development of an Environmental and Social Management Plan (ESMP) transposing the environmental and social mitigation measures as identified in the EIA into specific actions for implementation by Contractors (during construction stage) and MHP (during operation);
  • Ensure that the required construction permits are in place for preparatory and construction works on the road and biogas pipeline;
  • Define and implement a Security Human Rights and Transparency code of conduct or similar guidelines for the security personnel;
  • Development of a Traffic Management Plan and implementation of measures for vehicle monitoring;
  • Ensure all land acquisition and compensation agreements are in place prior to accessing any Project-affected land plot;
  • Define and implement a Project-specific Communication and Disclosure Programme to include aspects on the implementation of all Project components.

Technical Cooperation

None.

Company Contact Information

Victoria Nagirniak
v.sukhomlin@mhp.com.ua
+38 044 207 00 00
+38 044 207 00 02
www.mhp.com.ua
158, Ak.Zabolotnogo Street 03143 Kyiv Ukraine

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