Eurohold CEZ Acquisition and Modernisation



Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

14 Jul 2021



PSD disclosed:

09 Jun 2021

Project Description

Up to EUR 60 million senior loan to Eastern European Electric Company B.V., the fully owned subsidiary of Eurohold Bulgaria AD.

Project Objectives

The proceeds of the loan will be used to finance Eurohold's acquisition of the CEZ group's electricity assets in Bulgaria as well as CEZ Razpredelenie Bulgaria AD's 2022-2024 digitalisation and distribution network upgrade programme.

Transition Impact

ETI score: 70

Inclusive - CEZ Razpredelenie will support the development and implementation of a tailored bachelor course at the Technical University Sofia, which will help young people obtain nationally accredited certification and enhance their skills.

Well Governed - the Bank will support CEZ Razpredelenie developing and implementing climate governance and reporting capacity by establishing governance measures, strategy, risk management practices and disclosure in line with the recommendations of a dedicated action plan and of the Task Force on Climate-related Financial Disclosures.

Client Information


Eastern European Electric Company B.V. is a special purpose vehicle incorporated in the Netherlands fully owned by Eurohold Bulgaria AD and established for the purpose of this acquisition.

EBRD Finance Summary

EUR 60,000,000.00

Senior loan of up to 5 years tenor. 

Total Project Cost

EUR 525,000,000.00

Total project costs include EUR 335,000,000 for the acquisition by Eurohold of CEZ Group's shares in CEZ Razpredelenie, CEZ Electro, CEZ Trade, CEZ ICT, Free Energy Project Oreshetz, Bara Group, and CEZ Bulgaria ("CEZ entities"). The overall acquisition and capex financing package will include a combination of equity raise, preferred equity instrument and a senior loan syndicated to commercial banks.


The additionality of the EBRD financing includes resource mobilisation, risk mitigation and standard setting: helping projects and clients achieve higher standards through best international procurement standards.

Environmental and Social Summary

Categorised B (2019 ESP). The Environmental and Social (E&S) risks and impacts associated with modernizing transformer substations and distribution network as part of the 2022-2023 CAPEX Plan are readily identified. The EBRD use of proceeds will be used only for modernisation works of existing infrastructure of CEZ Razpredelenie. The environmental and social due diligence (ESDD) was carried out in-house considering the short timeline and the available information on this existing client. It included the review of annual reports from the previous transaction and the high level ESDD conducted by Eurohold, as well as interviews with CEZ Razpredelenie Management.


ESDD confirmed that CEZ Razpredelenie operates in line with national and EU requirements and with relevant international standards and industry best practice. The ESDD identified a number of recommendations to ensure compliance with the Banks PRs, as captured in the ESAP. The 2021 ESAP (coming in addition to the 2016 ESAP) has been prepared and will be agreed with CEZ Razpredelenie before Board approval.


CEZ Razpredelenie's management system includes an Environmental and Social Policy, a Code of Ethics, and several procedures (waste, wastewater, oil spills) including a procedure for HSE supervision of Contractors. CEZ Razpredelenie have introduced contractual terms regarding EHS matters for contractors; in addition Construction Environmental Management Plans (CEMPs) will be developed by contractors before they begin works, as captured in the ESAP.


CEZ Razpredelenie will develop a Gender-Based Violence and Harassment (GBVH) Policy to be included in the existing Code of Ethics, as required in the ESAP. It was confirmed during the ESDD that there is currently no planned major programme of retrenchment across CEZ entities. Collective Agreements are in place and will be renewed end 2021. The Union membership rate in CEZ Razpredelenie exceeds 60%.


A waste management procedure and an oil spill management instruction are in place. All oil tanks are located on concrete sites with secondary containment. CEZ Razpredelenie do not use oil that contains PCB.  Asbestos-containing materials (ACMs) are absent from CEZ Razpredelenie facilities.


There are currently four court cases in relation to occupational and community health and safety. The number of lost days due to work accidents has increased from 785 to 1824 between 2019 and 2020. Over 2019 and 2020, eight fatalities were recorded with communities (including three during attempts to steal electricity). The requirement for CEZ Razpredelenie to conduct an independent health and safety (H&S) audit for workers and community will be covenanted, in order to identify corrective actions and ways of improvement to reduce H&S incidents and accidents. In addition, a community guide for H&S around power lines will be developed and distributed as part of the CAPEX Plan implementation, as confirmed in the ESAP.


Currently CEZ Razpredelenie has some measures in place to minimise and monitor impact on birds. Bulgarian Society for the Protection of Birds (BSPB) experts inspect monthly (from April to November) risky power lines for birds and determine the power lines to be secured with priority in order to prevent bird mortality. Internal standards have been developed for the insulation materials to be installed.


The CAPEX program under EBRD Use of Proceeds will not involve any land acquisition and will not affect any protected area such as Natura 2000. CEZ Razpredelenie will continue implementing the existing Chance Finds Procedure.


The existing Stakeholder Engagement Plan (SEP), disclosed on CEZ website, will be updated to reflect the CAPEX program. CEZ Group has been publishing yearly Sustainability Report since 2017 (in line with GRI reporting). CEZ Razpredelenie will implement EU reporting requirements, as specified in the ESAP.


The Bank will monitor implementation of the ESAP through review of Annual Environmental and Social Reports (AESR) and communications with the CEZ Razpredelenie as necessary.

Technical Cooperation and Grant Financing


Company Contact Information

Vasil Stefanov

PSD last updated

09 Jun 2021

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

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794

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 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 to get guidance and more information on IPAM and how to submit a request.


Share this page: