Stora Enso MPF - Setles II

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 37314

Status Complete

Location

Russia

Business Sector

Manufacturing and Services

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 37314

Status Complete

Location

Russia

Business Sector

Manufacturing and Services

Notice Type

Private

Environmental Category

Approval Date

12 Dec 2006

Disclosure date

05 Oct 2006

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The proposed project comes within the framework of the Multi-Project Facility Agreement signed with the client in 2002. It is a follow-on investment of an existing client, OOO Setles, which is located in the village of Impilakhti (Karelia Republic). The Impilakhti sawmill started operations in 2003. The financing will be used for the modernisation and upgrading of the existing sawmill, that will allow to manufacture more value-added products.

At the Impilakhti Sawmill kiln drying facilities will be added and production capacity increased to 140 000 m3 per year. The number of employees is expected to increase by 11.

Transition Impact

The project is one of the few foreign direct investments in the sawmill sector in the region and is expected to play a positive role in promoting technological, environmental, forest management and corporate governance standards for the industry. This effect will be further enhanced by sending a signal to the market that a leading international player has a strategy to outsource processing to Russia.

Stora Enso promotes interactions with suppliers by transferring the necessary skills and technologies to the logging companies operating in the region through extending its wood procurement standards to the local suppliers, creating a long-term sustainable demand for their products and upgrading the regional transport infrastructure. The saw mill project sends a signal to the market that a leading international player is changing its strategy from only importing raw logs to outsourcing processing facilities to Russia. Moreover the expansion of the existing saw mill is part of a longer-term plan to build up a critical mass of wood procurement needed to support a pulp mill operation in Russia.

The Client

Stora Enso is an integrated paper, packaging and forest products company producing print and fine papers, packaging boards and wood products, areas in which the Group is a global market leader. Stora Enso sales totalled EUR 13.2 billion in 2005. The Group has some 45,000 employees in more than 40 countries in five continents and an annual production capacity of 15.7 million tonnes of paper and board and 7.4 million cubic metres of sawn wood products, including 2.8 million cubic metres of value-added products. Stora Enso is listed on the Helsinki, Stockholm and New York stock exchanges.

EBRD Finance

The EBRD would provide financing up to EUR 19 million in the form of A/B loans syndicated to commercial banks.

Project Cost

Total investments EUR 31.75 million, including EUR 12.5 million capital investments.

Environmental Impact

The Project has been screened MPF. In accordance with the Environmental Procedures agreed for the existing multi-project facility, Stora Enso has submitted to the Bank a Final Environmental Report (FER). The FER summarises the environmental studies and environmental due diligence undertaken by Stora Enso as well as the environmental, health and safety (EHS) issues associated with the Project and measures for their mitigation. The Bank’s environmental specialists have reviewed the FER and found the submitted information satisfactory, providing evidence that the MPF sub-project has been structured to meet Russian EHS requirements and EU environmental standards and that it will meet the Bank’s environmental requirements.

The investigations consisted of an environmental impact study carried out by independent consultants and Stora Enso’s specialists in accordance with the Russian permitting requirements. The study showed that the key additional environmental impact associated with the expansion project is the air emission of dust from the new 10 MW bark boiler, which due to selection of European based technology will meet local and EU environmental standards. The incremental wood raw material will be sourced from Stora Enso’s current wood procurement operations by redirecting to the mill some of the wood that is currently exported. The introduction of wood pelleting line will enable the sawmill to continue utilising 100% of the wood raw material either as products, woodchips sold to pulp mills or as fuel in energy production.

The Sawmill will continue adhering to Stora Enso's corporate policies and standards for the environment, occupational health and safety and social responsibility, including wood procurement procedures ensuring the wood for its operations will meet internationally recognised standards of sustainable forest management. This provides that the environmental, health and safety impacts of the Sawmill will continue to be negligible and efficiently mitigated. The Sawmill is implementing Stora Enso's corporate EHS policies and standards, including ISO 14001 environmental management system and aiming at integration in the Stora Enso's corporate wide EMAS (EU Environmental Management and Auditing System) certification of sawmills. It is systematically monitoring and reporting its environmental footprint in line with Stora Enso's corporate standards for internal and external reporting to ensure its compliance with Russian and EU environmental standards. Stora Enso’s environmental reporting to date has shown sound management of environmental and social issues. The Sawmill is committed to continue working in a close relationship with the local community.

Technical Cooperation

None.

Company Contact

Juha Kukkola,Vice-President,
Russian production Group,
Stora Enso Timber

Email: Juha.kukkola@storaenso.com

Transition impact

ETI Score:75

PSD last updated

01 Feb 2019

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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