Project number:


Business sector:

Manufacturing and Services

Notice type:


Environmental category:


Approval date:

15 Sep 1998



PSD disclosed:

17 Aug 1998

Project Description

Rehabilitation and modernisation of kraft paper (made of virgin wood) and sack production facilities of the sole kraft paper producer in Bulgaria. This project was first approved in 1998 and additional financing approved in 2000. In 2002, further working capital was approved.

Project objectives: The operation will enable financing of the continued operation of the paper production facilities until they are sole to a strategic investor.

Transition Impact

The project will provide a model to the industry of the Bank's continued willingness to provide the support necessary to address the difficulties associated with restructuring;

Technology transfer to upgrade existing production assets in Bulgaria and enhance their long-term competitiveness.

The Client

Celhart AD, a privatised Bulgarian company, manufactures kraft paper and sacks. Celhart is majority owned by Isiklar Holding, a leading Turkish industrial group with a dominant position in kraft sack manufacturing.

EBRD Finance

In 1998, aUS$ 13.9 million (ECU 12.6 million) loan and a US$ 1.5 million (ECU 1.4 million ) equity investment in Celhart. In 2000, further financing in the amount US$ 9.5 million (€10.5 million). In 2002 further US$ 7.5 million (€8.3 million) was provided as working capital to re-start the paper machines.

The International Finance Corporation is providing a parallel amount of financing with the same terms as the EBRD.

Project Cost

US$ 77.6 million (€86.2 million)

Environmental Impact

This operation has been screened B/1, requiring (i) an environmental analysis of Celhart's existing facilities; and (ii) an environmental analysis of the proposed rehabilitation and modernisation programme. These analyses were conducted in cooperation with IFC.

The analyses confirmed that the proposed rehabilitation and modernisation programme will comply with Bulgarian and the World Bank environment, health and safety regulation standards. Several issues identified by the environmental audit will be addressed through the implementation of an Environmental Action Plan (EAP), which has been agreed with the client and included in the Capital Expenditure Programme. Among other things, the EAP contains the following improvements:

  • significant reduction of wastes requiring landfilling;
  • reduction of sulphur emissions and particulates;
  • implementation of a more comprehensive occupational health and safety policy.


Management has agreed to implement the EAP and will report to the EBRD and IFC on progress with regard to that commitment.

Technical Cooperation


Company Contact


Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

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Text of the PIP

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