DFF - Umka Cardboard



Project number:


Business sector:

Manufacturing and Services

Notice type:


Environmental category:


Approval date:

01 Dec 2020



PSD disclosed:

02 Dec 2020

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

Provision of a EUR 10 million senior secured loan to Umka d.o.o. ("Umka" or the "borrower"), a limited liability company incorporated in Serbia and the leading recycled cardboard manufacturer in the Western Balkans region. 

The loan proceeds will be used to finance a part of the company's EUR 44.5 million investment in the expansion of its manufacturing capacity through an upgrade of the existing cardboard machine.

Project Objectives

The investment will result in:

  • Higher energy/resource efficiency of Umka's operations resulting in lower energy intensity of its operations in terms of electricity and gas spent per unit of product.
  • The increase in operating scale and removal of bottlenecks will result in lower input costs and operating cost per unit of product, making the company more cost efficient and  more competitive.
  • Environmental benefits since the company will invest in a new system for aerobic and anaerobic treatment of the plant's wastewater discharge.
  • Increase in waste paper collection and recycling in Serbia and the Western Balkans region thanks to Umka's post-project substantial increase in waste paper recycling.
  • Introduction of coated liners as a new product category with higher profit margin as well as improvement of existing products' quality is expected to result in increase of Umka's share of sales with existing customers as well as to acquire new customers that require higher quality of cardboard.

Transition Impact

ETI score: 60

The project entails the replacement of some old equipment in the cardboard production line, which would result in improvement in specific energy and resource consumption as well as end-product quality improvement, and production capacity increase. Moreover, the project is expected to increase the collection and treatment of waste paper by 38% (around 50,000 tons per year). The GET Clearing House confirmed that the project is 100% GET.

Client Information


Umka d.o.o., a limited liability company incorporated in Serbia, is the leading recycled cardboard manufacturer in the Western Balkans region with 2019 revenues of EUR 60 million, EBITDA of EUR 12 million and net profit of EUR 8 million. The company is 100%-owned by Kappa Star Limited, an investment company incorporated in Cyprus which is 100%-owned by Mr. Nebojsa Saranovic.

EBRD Finance Summary

EUR 10,000,000.00

EUR 10m senior secured loan to the borrower.

Total Project Cost

EUR 44,500,000.00

Total project costs amount to EUR 44.5 million and represent investment in expansion of manufacturing capacity through upgrade of the existing cardboard machine.


EBRD offers a tenor of 8 years including 2 years grace period, which is longer than average loan tenor available to the client from commercial banks in the local market on reasonable terms and conditions.

Environmental and Social Summary

Categorised B (2019 ESP). The environmental and social issues associated with the provision of capex to expand the manufacturing capacity of the cardboard producer Umka d.o.o. (the Company) from 130,000t/a to 180,000t/a can be readily identified and managed.

Due diligence, carried out by ESD, focused on Umka's existing E&S and OHS management systems, the current facilities and operations, and the planned expansion. The Company has adequate Covid-19 response plans and policies in place and is not planning retrenchment as a result of the pandemic. Environmental emissions are in line with those prescribed in the plant's IPPC permit. Identified issues that need to be addressed, include: a lack of comprehensive E&S and OHS management systems; a lack of HR policies including supply chain management; inadequate storage of hazardous substances; legacy use of ODS in cooling systems; no stakeholder engagement programme in place; and outstanding environmental and water permits for the new WWTP.

To address the issues, an ESAP has been developed, and will be agreed with the Company prior to project signing. The ESAP measures include: revision and update of appropriate E&S and OHS management systems and relevant policies to cover issues described above, including a phase out of ODS; obtaining the required permits for the on-site WWTP; and the development of a grievance mechanism for the public. The EBRD will monitor the implementation of the ESAP through annual reports from the client and site visits as required.

Technical Cooperation and Grant Financing

TC funds to support this operation have been provided by the Shareholder Special Fund under the GET Project Preparation Programme. The TC funds were used to cover part of the costs associated with external legal due diligence. The cost-sharing principle was observed with the Borrower participating with 20% in the total legal due diligence costs.

Company Contact Information

Jadranka Priljeva
381 11 3602 600
Fabrika kartona Umka d.o.o., 13. oktobra 1, 11260 Umka, Serbia

PSD last updated

02 Dec 2020

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

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Tel: +44 20 7338 6794
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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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