A senior loan to Lafarge Cement Polska (LCP) to support the company’s modernisation and development programme in the building materials sector in Poland.
Through its loan, the EBRD will support LCP with the implementation of an investment programme for the modernisation of the company’s cement plants. The investments are expected to result in a reduction of production costs, improved efficiency, reduced maintenance costs as well as a reduction in adverse environmental impact due to lower air emissions.
By funding the modernisation of LCP’s building products operations, the Bank will be supporting further modernisation and promoting competitiveness within this sector. Finally, the investments are likely to have a positive effect on ancillary businesses supporting and servicing the building products sector. The overall result will be an improved sector able to effectively compete with western European cement producers following EU accession.
LCP is one of the largest cement producers in Poland operating cement plants in Kujawy and Malogoszcz, with an aggregate market share of 22 per cent and total installed cement production capacity of 3.7 million tons per year. The company is a subsidiary of Lafarge Polska, the project sponsor. In addition to cement production, Lafarge Polska produces lime, aggregates, limestone and ready-mixed cement. Both LCP and the sponsor are joint-stock companies incorporated in Poland, and established by the French based Lafarge Group, world leader in building materials. In addition to the corporate financing of LCP, the EBRD holds a 22.42 per cent stake in Lafarge Polska.
The EBRD is providing a senior multi-currency loan to LCP for €75 million or the equivalent in Polish zloty. Commercial banks are to provide the remaining €75 million for the project through a parallel financing structure.
The total project cost is estimated to be approximately €180 million.
The project has been screened B/0, requiring an environmental analysis of the proposed development. As environmental audits were carried out during the initial Bank’s investments in the facilities under the MPF facility, there was no need to carry out an audit for this transaction. Based on the findings of the audits, Environmental Action Plans (EAPs) were developed for Kujawy and Malogoszcz and agreed with the Bank. The EAPs which are currently being implemented will bring the companies in line with the relevant Polish and EU environmental, health and safety standards.
The proposed investment programme will result in significant environmental benefits. Use of latest technology will result in reduced environmental impact, primarily through reduced emissions and energy use. The proposed investments have been structured to fully meet Polish and EU environmental standards.
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