EBRD loan supports foray of Poland’s Grupa Azoty into new technology

By Axel  Reiserer

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Chemical producer plans integrated units for propane dehydrogenation and polypropylene production

  • EBRD loan of up to €125 million equivalent for Poland’s leading chemical group
  • Company plans to move to higher-margin products
  • New technology and improvements in recycling to benefit the environment

The leading Polish chemical producer Grupa Azoty is taking a huge step in its development through the introduction of new technology and a new production line with support from the European Bank for Reconstruction and Development (EBRD).

The EBRD will provide a multicurrency loan for the equivalent of up to €125 million for the construction and operation of a fully integrated propane dehydrogenation unit and a polypropylene unit to produce propylene and polypropylene. Polypropylene is the second-most widely produced plastic after polyethylene and used in auto industry, durable consumer goods and packaging.

The new facility will be located in Police, a town in north-western Poland near the border with Germany. The total project cost is US$ 1.8 billion, with other financing partners including Hyundai Engineering, the Korean Overseas Infrastructure & Urban Development Corporation and Grupa Lotos. Grupa Azoty is listed on the Warsaw Stock Exchange and the Polish state treasury owns 33 per cent of the company.

The new integrated unit will be the second in the European Union and the first in the EBRD regions to apply an innovative new process technology that aims to reduce the overall carbon intensity of propylene production and to reduce emissions in the production process. The environment is also expected to benefit from Grupa Azoty’s commitment to obtaining energy from renewable sources and implementing best practices for recycling plastic.

The investment will allow Grupa Azoty, the largest chemical group in Poland and the second-largest producer of fertilisers and related products in Europe, to open new lines of production with higher margins. The goal is to reduce dependence on the cyclical fertilisers market and to strengthen the company through a diversification of its business.

Frederic Lucenet, EBRD Director, Manufacturing and Services, said: “We are pleased to see Grupa Azoty progress with its impressive investment plans despite the coronavirus pandemic. It is important to us that the proposed new process technology aligns with the EU Taxonomy for sustainable finance under the European Green Deal. The project also benefits from Grupa Azoty’s commitment to obtaining energy from renewable sources, to developing a low-carbon pathway and to reporting under the guidelines of the Task Force on Climate-related Financial Disclosures. We are also pleased to see that Grupa Azoty will be the first Polish representative on the European Circular Economy Stakeholder Platform.”

Wojciech Wardacki, President of the Management Board of Grupa Azoty and of Grupa Azoty Zakłady Chemiczne “Police”, commented: “Grupa Azoty and the EBRD have a shared history of cooperation. Therefore, we are glad that the EBRD is among the group of Polish and international institutions that will provide credit for our project. This is a very important investment project to both Grupa Azoty and the Polish economy. It will enable the diversification of Grupa Azoty’s business activities and will have a positive impact on Poland’s position in the plastics sector, as well as strengthening the country’s independence in terms of energy and raw materials.”

The EBRD started investing in Poland in 1991 and to date has provided €10.3 billion through 436 projects to all sectors of the economy.

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