Kronospan Mogilev



Project number:


Business sector:

Manufacturing and Services

Notice type:


Environmental category:


Approval date:

24 Jul 2019



PSD disclosed:

19 Jun 2019

Translated version of this PSD: Russian

Project Description

Long-term senior loan of up to €84.6 million to Kronospan OSB FLLC, a foreign limited liability company domiciled in Belarus, to finance the capacity expansion programme and infrastructure upgrade at its plant in Mogilev, as well as to refinance the Company's existing debt to EBRD.

Kronospan OSB FLLC is an existing client of the EBRD. The existing loan to the Borrower was provided in 2013.

Project Objectives

The proposed facility will support the investment programme carried out by Kronospan at its oriented strand board (OSB) plant in Mogilev. The proceeds from the EBRD loan will be allocated towards capital expenditure focusing on the capacity increase in its OSB manufacturing facility, the purchase of railway wagons to facilitate transportation of its products in the region, and the development of the plant's infrastructure. The Project will enable Kronospan Mogilev to increase its production capacity, start exporting into the new markets, and to expand its training programmes for workers to improve their skills.

The proposed facility will also support the investment programme carried out by Kronospan at its particleboard and MDF plant in Smorgon. The proceeds from the EBRD loan will be allocated towards capital expenditure focusing on the capacity increase in its particleboard manufacturing facility, the development of the plant's infrastructure, the creation of a furniture production cluster and a multifunctional training and exhibition complex at the site in Smorgon. The Project will enable the Kronospan Smorgon to increase its production capacity and to expand its training programmes for workers to improve their skills.

Transition Impact

The transition impact of the proposed project will be derived from:

1). Export to the new markets: Kronospan Mogilev is planning to expand its OSB export into new geographies, such as North America, Latin America and Asia.

2). Employees' training to acquire or improve skills required in the wood working industry. The Project would enable the enhancement of skills in Belarus to Kronospan's international levels in different areas through centralised training facilities, thus further developing the standards in the wood industry.

Client Information


Kronospan OSB FLLC (Kronospan Mogilev) and Kronospan FLLC (Kronospan Smorgon) are leading producer of wood-based panels in Belarus, subsidiaries of Kronospan Holdings East LTD, Cyprus.

Kronospan is the market leader in the wood-based panel sector. It manufactures wood-based panel products at over 40 sites and has 16 distribution centres in 30 countries, including Austria, UK, Germany, Luxembourg, Italy, Spain, France, Denmark, Latvia, Poland, Czech Republic, Slovakia, Bulgaria, Romania, Hungary, Croatia, Serbia, Russia, Belarus, Ukraine, USA and China.

EBRD Finance Summary

EUR 45,000,000.00

The EBRD is organising a financing package of €208.8 million out of which up to €40 million will be syndicated to commercial banks.

Total Project Cost

EUR 45,000,000.00

1). EBRD A-loan: Capex of EUR 85m, consisting of €40m Capex at Kronospan Smorgon and €45m at Kronospan Mogilev.

2). EBRD A-loan: refinancing of existing EBRD debt of €83.8m, consisting of €44.2m at Kronospan Smorgon and EUR 39.6m at Kronospan Mogilev.

3). EBRD B-loan: refinancing of investment payables of €40m at Kronospan Smorgon.

Environmental and Social Summary

Categorised B (ESP 2014). Due diligence is still on-going and while the site visit has been undertaken, the documentary review of Mogilev is being finalised.  Due diligence has shown that the key environmental and social (E&S) impacts and risks associated with the purchase of new equipment for oriented strand board (OSB) production lines, construction of the new railway lines and access roads as well as purchase of rolling stock include, among others, permitting process, wood supply sustainability, air emissions, fire and explosion safety, waste management as well as stakeholder engagement. A site visit and local environmental impact assessment review has been undertaken and an independent consultant was retained to carry out a BAT Assessment (Best Available Techniques) of the whole plant in line with EU BREF (Best Available Techniques reference documents) for Wood Based Panels and an Environmental and Social Assessment of the new project to ensure that it is structured to meet relevant performance requirements and national legislation. The current project's environmental and social action plan (ESAP) implementation shows satisfactory progress. Based on the final results of environmental and social due diligence, the ESAP will be updated and amended, and agreed with the borrower.

Technical Cooperation


Company Contact Information

Natalia Pokinska
+380 3344 43 600
+380 3344 43 619
Kronospan UA LLC 20 Lutska Street 45400 Novovolynsk Volyn Region Ukraine

Business opportunities

For business opportunities or procurement, contact the client company.

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