Proposed loan to support modernisation of Balkanpharma’s pharmaceutical production facilities in a plan to achieve Good Manufacturing Practice (GMP) certification.
The project would allow the company to upgrade its production facilities to Western standards, with the goal of obtaining GMP certification. The project involves construction of new facilities, modernisation of existing facilities, and environmental upgrades.
Pharmaceutical production has traditionally been a flagship industry in Bulgaria. While privatisation in the sector has already been completed, the project will demonstrate that the industry can attract long-term corporate lending from international sources. The success of Balkanpharma will also demonstrate the competence of the workforce in a technically sophisticated sector of the economy. The project will have a strong demonstration effect and will facilitate the preparation of Bulgarian industry towards EU accession.
Balkanpharma Holding AD Bulgaria is a Bulgarian joint-stock company which owns controlling interests in three pharma-ceutical production companies in Bulgaria: Balkanpharma-Razgrad AD, Balkanpharma-Dupnitza AD, and Balkanpharma-Troyan AD.
EUR21.5 million corporate loan, with one-year grace and four-year repayment period.
The project has been screened B/1, requiring an environmental analysis and an environmental audit. International environmental consultants undertook environmental due diligence, which included an independent assessment of past environmental damage. An environmental specialist from the EBRD's Environmental Appraisal Unit also conducted a site visit to the three facilities in January 2001. Balkanpharma facilities are all currently in compliance with Bulgarian legislation. Furthermore, US Food and Drug Administration (FDA) regularly inspects the Razgrad facility as bulk chemicals are marketed in the United States, and no significant compliance issues have been raised during recent visits. Because of this experience of dealing with the FDA, systems, procedures and staff training in a range of safety and environmental controls are complete across all areas of the site. Since privatisation, the company has substantially upgraded its pharmaceutical manufacturing facilities which, along with the Bank's investment, will significantly improve Balkanpharma's performance against EU and World Bank environmental, health and safety standards. These upgrades are detailed in the Environmental Action Plan (EAP), which form part of the company's capital investment programme. Environmental issues form a crucial component of the international requirements for Good Manufacturing Practice (GMP) and environmental upgrades will add significantly to the company’s strategy to export products to western Europe. The implementation of the EAP and introduction of environmental, health and safety management practices will establish a strong basis for continuous improvement of environmental performance and will assist in achieving GMP certification. The company's proactive approach to environmental issues should act as a useful demonstration to other Bulgarian companies.
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Text of the PIP