Translated version of this PSD: Ukrainian
The EBRD is considering providing a €29.8 million loan to Ukrplastic, to finance the Company’s energy efficiency investments, launch of new product segments and to restructure its balance sheet.
The project will facilitate launch and domestic production of new international quality products currently unavailable in Ukraine. It will introduce new energy efficiency measures, which will result in significant Green House Gases emission savings, with a strong demonstrational effect for the industry. As a result of project implementation Ukrplastic will improve its corporate structure, financial transparency and management.
Ukrplastic - the leading producer of flexible plastic packaging in Ukraine and the CIS
Categorized B (2008), requiring an Environmental and Social Due Diligence (ESDD), consisting of an environmental analysis of the proposed investment programme and an environmental and social audit of the existing production facilities.
Due diligence undertaken and outcomes
The ESDD was undertaken by independent consultant and site visits by ESD specialist. The ESDD has confirmed that the Company has a good environmental and social management system and has the capacity to fully implement the Bank’s Performance Requirements (PRs) of Environmental & Social Policy (2008). Ukrplastic’s management systems are certified to comply with ISO 9001 quality standards, ISO 22000 food safety standards (including HACCP), and ISO 14001 environmental standards requirements, and there is a plan to apply for OHSAS18000 health and safety certification this year. The plant has undergone significant modernization over last ten years, and new investments will have beneficial environmental effect, especially after installation of solvents recovery system.
Ukrplastic’s current and planned operations are in general compliance with national legislation and the planned investment programme is structured to meet both national and EU environmental standards. In terms of social aspects, the Company has good Human Resource management system and is addressing social and labour issues in line with national requirements as well as corporate standards that meet the Bank’s PRs. Ukrplastic is a key employer in the area, and staff turnover is relatively low.
The new investments, notably solvent recovery system installation, lamination line project and CHP plant commissioning, will have significant environmental benefits, through reduced Volatile Organic Compounds (VOC) emissions, higher operational efficiency and lower energy use. However, there are a number of potential improvements that are included in the Environmental and Social Action Plan (ESAP), which was fully agreed by the Company. The ESAP include among other the following requirements:
- Establishment of designated noise protection zones in production areas with high noise levels;
- Management review of hazardous materials to eliminate or reduce and control their use;
- Development and implementation of a Solvents Management Plan;
- Implementation of identified energy efficiency improvements;
- Renovation of surface water drainage;
- Development of EHSS corporate policies;
- Undertake water minimisation audit with the implementation of findings;
- Review and monitor the use Personal Protective Equipment (PPE) provision for all job functions; and
- Implementation of an official grievance mechanism for workers and public.
In addition, as part of the EHSS review, an Environmental and Social Management and Monitoring Plan (ESMMP) has been developed which is a high level overview of the key management and monitoring that will be conducted during the construction and operational phases of the new proposed developments to ensure effective management of environmental and social impacts.
A stakeholder Engagement Plan (SEP) is being developed by the Company in line with PR10. As part of the SEP implementation the Company will publish on its website a Non-Technical Summary (NTS) summarizing the project, associated with it environmental and social issues, and measures to mitigate them.
The Company will:
- implement the ESAP (as agreed with the Company);
- implement a Stakeholder Engagement Plan (SEP);
- provide the Bank with an Annual Environmental and Social Report (AESR), including updates on the ESAP, and notification on any material accidents or incidents;
- facilitate periodic monitoring visits by the Bank’s staff or appointed representatives when deemed necessary.
Energy audit was arranged by Energy Efficiency and Climate Change and funded by the Neighbourhood Investment Facility to review proposed investments and identify priority energy efficiency investments to be included in the EBRD financing.
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