Up to EUR 20 million senior secured loan to Sofia Med AD
The proceeds of the loan will be used to finance the Company's 2020-2022 Capex programme aiming to expand production capacity in respect of copper and copper alloy strips, mainly to respond to increasing demand for copper in 'green' applications.
ETI score: 60
Green - the project entails capacity increase for manufacturing of copper and copper alloy strips, to be used for e-mobility and renewable energy applications. The project qualifies for EBRD Green Economy Transition ("GET") recognition under the "Metal production for climate action" category of the new joint Multilateral Development Banks' ("MDB") methodology.
SOFIA MED AD
Sofia Med AD ("Borrower" or the "Company"), a joint stock company incorporated in Bulgaria, is a copper fabricator, producing mostly rolled and extruded copper and copper alloy products for a number of sectors.
EBRD Finance Summary
Senior secured loan of up to 7 years tenor
Total Project Cost
The additionality of the EBRD financing includes risk mitigation and standard-setting: helping projects and clients mitigate climate governance risks and take climate action, such as to improve their internal corporate governance for managing climate risks.
Environmental and Social Summary
Categorised B (2019 ESP). The Company is an existing client of the Bank and has demonstrated a robust approach to Environmental and Social ("E&S") matters. The Project involves significant CapEx investment, which includes adding two new bell annealing furnaces increasing the annealing throughput capacity from 68 000 to 98 000 tons p.a., as well as a new cold rolling unit, increasing the capacity from 100 000 to 170 000 tons p.a.. The E&S risks and impacts are associated with construction and operation of the new project and include health & safety, air emissions, fugitive emissions, water management, energy efficiency and noise. These impacts are similar to those associated with existing operations and can be readily addressed through mitigation measures and existing E&S management provisions. The previous E&S Action Plan ("ESAP") agreed with EBRD, has been fully implemented. Nevertheless, the E&S due diligence ("ESDD") identified some areas that the Company needs to focus on and a limited ESAP has been developed and will be agreed with the Company before Board. Key action include maintaining both the supply chain management system in line with EBRD's requirements as well as the internal and external grievance mechanism and enhancing Company's policies with regards to gender-based violence and harassment ("GBVH"). Reporting by the Company to EBRD on E&S matters will continue on an annual basis.
ESDD was conducted by the EBRD Environment and Sustainability Department ("ESD") and included a review of EBRD's previous appraisal, annual E&S reporting by the Company and follow up questions to consider EBRD's 2019 E&S Policy including on supply chain risk management and GBVH. The Company operates certified management systems to manage environmental and health and safety risks. Labour provisions are aligned with PR2 and covered within various HR policies and procedures, including provisions on harassment in the work place, equal opportunities and non-discrimination, employee code of conduct, employee training and a grievance mechanism. No retrenchment of employees was required due to COVID-19. The Company operates three production units: Foundry, Rolling and Extrusion mills that are permitted and in compliance under Annex 1 of the EU Industrial Emission Directive as well as with the BAT/BREF documents for Non-ferrous Metals Industries. The project will also be required to be fully aligned with the IED requirements and the Company needs to amend their permits for each stage of its implementation. The Company has further implemented various energy efficiency investments to reduce energy demand. The Company's facility and proposed project (within the same facility) are located in an industrial area of Sofia, distant to any communities. No land acquisition is required for the Project. The Iskar River is in proximity of the facility, however this does not pose a significant flood risk, as there have been no known flooding events registered and river flows are regulated through the Iskar Lake Dam located 50 km upstream.
Occupational health and safety provisions and performance are in line with EBRD's requirements. Such provisions extend to the transport of its products by road. The Company has put in place appropriate controls to manage risks associated with COVID-19.
The project is not associated with any impacts to biodiversity or cultural heritage. The Company has in place a stakeholder engagement plan and associated grievance mechanism.
Technical Cooperation and Grant Financing
As part of the engagement, EBRD will provide TC support to the Company to develop and implement a Low-Carbon Pathway ("LCP") to align their operations to the goals of the Paris Agreement on climate change.
Company Contact Information
4 Dimitar Peshev str., 1528 Sofia, BULGARIA
PSD last updated
06 Oct 2021
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Environmental and Social Policy (ESP)
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More information on the EBRD’s practices in this regard is set out in the ESP.
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Access to Information Policy (AIP)
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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 email@example.com to get guidance and more information on IPAM and how to submit a request.