Arctic Paper

Location:

Poland

Project number:

46825

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

06 Jul 2016

Status:

Complete

PSD disclosed:

19 Sep 2016

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The EBRD is providing a long-term loan of up to EUR 30 million to Arctic Paper S.A. (the "Company" or "Arctic Paper"), one of the leading European producers of bulky book paper and high-quality graphic paper headquartered and managed out of Poland and production plants located in Poland and Sweden.

Project Objectives

EBRD loan will be used by the Company to finance investments into resource and operating efficiency improvements as well as capacity expansion in Poland. These will lead to increased competitiveness of Arctic Paper in the European graphic paper market.

In addition the operation will support restructuring of the balance sheet of the Company through extension of maturities of the existing short-term debt as part of a wider restructuring package alongside commercial banks and a bond programme.

Transition Impact

ETI score: 55

The main source of transition impact is expected to be derived from the demonstration of new replicable behaviour and activities through implementation of investment programme in the Polish mill of the Group that will include energy and resource efficiency investments.

Client Information

ARCTIC PAPER SA

Arctic Paper Group is a leading European producer in terms of production volume of bulky book paper, offering a broad range of products in the segment and one of the leading producers of high-quality graphic paper in Europe. Currently, Arctic Paper operates one paper mill in Poland and two mils in Sweden with total paper capacity of 705,000 tons p.a. The company also owns controlling stake of Rottneros AB, a Swedish pulp production company operating 2 pulp mills with 400,000 tons production capacity. In 2015 the Company generated consolidated sales of PLN 2,900 million employing a workforce of approximately 1,770.

EBRD Finance Summary

EUR 29,330,733.17

Total Project Cost

EUR 81,630,733.00

Environmental and Social Summary

Categorised B. Environmental and social issues associated with the project are site specific and can be readily assessed and mitigated as part of an Environmental and Social Due Diligence (ESDD). A fit for purpose ESDD was undertaken by the Bank of the Company.

An independent consultant undertook the ESDD and confirmed that the Company has the capacity to fully implement the Bank's Performance Requirements (PRs), and is compliant with National and EU legislation as well as all the relevant Bank PRs. The company has a dedicated EHS manager and is certified to ISO 14001 and OHSAS 18001.

The location of the plant is environmentally sensitive and the region is of great importance for water-related birds, both breeding and migratory. In all 9 Natura 2000 sites are located nearby on the Polish and German border, including Special Areas of Conservation (SACs) and Special Protection Areas (SPAs). All the Natura 2000 areas are designated to protect water dependent habitats and species of Odra and Warta rivers floodplains. The plant itself is located in the Warta River valley and borders Natura 2000 PLC080001 area, which is an overlapping SPA and SAC and partly covered by "Warta River Mouth" (Ujscie Warty) National Park (established in 2001) and its protection buffer zone. Part of the National Park is also marked as a Ramsar Area (former Slonsk Reserve) and entire Natura 2000 area is listed as IBA (Important Birds Area). The independent ESDD has confirmed that the investment programme will not influence the surrounding environment or the protected sites, namely land use and environmental quality to the degree which could impact habitats and animal species being subject of interest of European Community. This was confirmed by the Competent Authorities and through the permitting process to date, the current investment projects based on screening undertaken do not require an Appropriate Assessment.

Overall, the Company is developing a comprehensive program of modernization and working with the local community and local authorities. It should be noted that the Company has a well-developed site specific stakeholder engagement plan (SEP) which forms part of a site specific social, environmental, health and safety management system.

The paper plant has a valid integrated permit, in line with the requirements of the Industrial Emissions Directive (IED), and are subject to regular inspection from the regulators. The permit is being updated in 2016. To ensure on-going compliance and the implementation of Best Available Techniques (BAT) in accordance with good international practice, the Company has made significant investments in technological and environmental upgrades, notably upgrading the wastewater plant, reducing fugitive emissions well as further energy and water efficiency measures.

Based on the ESDD an Environmental and Social Action Plan ("ESAP") has been developed and agreed with the Company. This includes the need for continued implementation of the SEP and compliance with EU BAT derived environmental standards. The Company will also further develop is CSR program.

Additional Information on the Company can be obtained from the Company web site: http://www.arcticpaper.com/pl/Start/Arctic-Paper/Our-Mills/Arctic-Paper-Kostrzyn/About-us/

The Bank will monitor the implementation of the Project.

Technical Cooperation and Grant Financing

Technical Cooperation funds from Special Shareholders' Funds were used to perform energy and resource efficiency audit at Kostrzyn paper plant in Poland.

Company Contact Information

Malgorzata Majewska-Sliwa
malgorzata.majewska@arcticpaper.com
+48 601 554 806
+48 616 262 001
www.arcticpaper.com
Arctic Paper SA, ul. J.H.Dabrowskiego 334a, 60-406 Poznan, Poland

Implementation summary

The Project introduced investments into resource and operating efficiency improvements as well as ~30kt capacity expansion in Kostrzyn, Poland. These would lead to increased competitiveness of Arctic Paper - a leading European producer of bulky book paper - in the European graphic paper market. Despite significantly deteriorated market conditions, the investment was finalised in September 2019 with no cost overruns. It is an example of an investment that allows for the expansion of the range of paper in the Company's offer, both graphic and packaging, thanks to which the paper mill in Kostrzyn adapted to changes on the market. Arctic Paper increased not only the production efficiency, but also the energy efficiency of the production process, which translated into lower CO2 emissions.

The Project also ensured strict environmental, energy-efficiency and social standards. The Company has adhered to the Environmental and Social Action Plan requirements.

As a part of Transition impact, the Project has contributed to overall competition by expanding the Company's product portfolio and shifted higher the energy and resource efficiency efforts.

PSD last updated

29 Sep 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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