The project covers the construction of the biomass facility and the modernisation of the existing combined heat and power plant (the “CHP”) owned by Saturn Management, a project company set up to supply heat and energy to Mondi Swiecie, one of the largest European paper producers.
Saturn Management has already in the past concluded the initial investments, financed by two commercial banks on a project finance basis, and the CHP is fully operational. In 2009 the Bank co-financed Saturn Management realising two projects in order to extend the operation of CHP:
- conversion of the existing coal boiler into a biomass boiler with 80MWt capacity, and
- large repairs, modernizations and new investments in the existing installations, together the “Project”.
Currently the Bank is considering an extension of the financing, project dedicated to finance additional investments at the CHP facility which include a new turbine and additional modernisation This extension will further improve the efficiency of the CHP and ensure it meets the best international practices.
The Project will support the first large scale biomass fired power plant in Poland owned by a local investor with a strategy for expanding biomass operations. As such, the Project has the potential to lead to important demonstration effects of large scale biomass energy which could attract new developers and investors in the renewable energy sector. In fact, the number of biomass projects so far completed in Poland is limited and the renewable energy sector still represents a very small share of overall Polish power generation. The currently considered project extension additionally demonstrate continues efficiency improvement to ensure the project is consistently up to the highest industry standards.
Saturn Management Limited Liability Partnership - a special purpose vehicle, incorporated and fully owned by Polish Energy Partners S.A. for the purpose of implementation and operation of the CHP in Swiecie.
EBRD has already committed EUR 30 million long-term debt financing package alongside other commercial lenders and is currently considering increasing this amount by a further EUR 8 million.
Environmental classification and rationale
Category B, requiring an environmental and social due diligence (ESDD) in line with the Bank’s Environmental and Social Policy. The currently considered extension includes the construction of a new turbine, biomass dryer and additional modernisation investments at the existing CHP. All of these investments where initially screened as part of the 2009 ESDD and the current ESDD has focused on the EHS management systems and implementation of the agreed Environmental and Social Action Plan (ESAP).
Due diligence undertaken and outcomes
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). This is further begin strengthen at PEP SA level with the additional of a full time EHS manager. The ESDD has also confirmed that the Company is implementing on time the ESAP. The associated Mondi Swiecie pulp and paper plant is well run and in full compliance with IPPC requirements, the company is undertaking significant investments to further improve production and operations. These will have significant energy efficiency and environmental improvements.
The existing CHP and the new biomass plant are complaint with the EU Large Combustion Plan Directive (LCPD) and the IPPC Directive. The ESDD has confirmed that the current project is complaint with the Banks Performance Requirements. The Company has developed a stakeholder engagement plan (SEP) and is implementing an environmental and social action plan (ESAP). The Bank continues to monitor the implementation of the project, and an independent audit will be required every three years to assess the status of implementation of the project and verification that the biomass is from sustainable sources.
The main environmental and social impact of the Project is associated with the fuel supply chain. This includes possible road traffic impacts and the need to ensure that transport of biomass does not have a significant impact on local communities, as well as ensuring that the biomass is obtained from sustainable sources.
A Non Technical Summary (NTS), ESAP and Stakeholder Engagement Plan (SEP) of the Project can be found on the Company web sites:
- The Company will implement the ESAP (as agreed with the Company) and an Environmental, Health and Safety Management System.
- The Company will be required to provide the Bank with an annual environmental report, including updates on the ESAP (i.e. implementation status of the various projects), and notification on any material accidents or incidents.
The Company will facilitate periodic monitoring visits by Bank staff or appointed representatives, when deemed necessary.
Industrial Energy Outsourcing Director
Polish Energy Partners SA
ul. Wiertnicza 169
tel. +48 22 840 75 70
fax. +48 22 651 89 01,
For business opportunities or procurement, contact the client company.
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Tel: +44 20 7338 7168
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