EUR 20 million senior term loan to JSC Farmak.
Financing of working capital needs of pharmaceutical production operations: purchase of raw materials, payment of salaries, storage and transportation of finished goods and their subsequent sale in Ukraine and for export.
ETI score: 70
- Resilient: project supports a business directly affected by the conflict and would enable the client to continue operations.
- Inclusive: project would help to alleviate current shortages of medicine and counteract upward pressure on prices, benefiting the local population as well as internally displaced persons across the country.
PJSC Farmak is a leading manufacturer of pharmaceuticals in Ukraine with pre-war 5.7% market share by value in a highly fragmented market.
EBRD Finance Summary
Total Project Cost
The EBRD financing is provided under extraordinary circumstances stemming from the war on Ukraine, offering a unique set of terms, attributes and conditionalities.
Environmental and Social Summary
Categorised B (ESP 2019). Provision of working capital to the existing Client producing APIs and pharmaceutical formulations is associated with standard for the industry E&S impacts linked to GMP compliance, solid waste and wastewater management, OHS practices and product safety, as well as new risks related to employees safety working in the war conditions. The Company provided timely ESAP updates as part of annual monitoring in the past and is on track with the existing loan ESAP implementation. The AESR for 2021 is still outstanding and will be deferred in submission due to the critical situation in the country and the priority given to restoring API and other raw materials supply following warehouse fire. The AESR review will be carried out in 1H2022 post-disbursement. Overall, the Client's EHS management systems and internal resources demonstrated capacity to implement best practices and address identified issues on the past projects, e.g. soil contamination, waste water treatment, and pharmacovigilance among others.
Technical Cooperation and Grant Financing
TC: The preparation of the transaction was supported by the Shareholder Special Fund TC funds of EUR 50,000, which covered associated legal due diligence costs.
Non-TC: The project is approved on the basis of minimum 50% of donor funding coverage.
A first loss guarantee of 44.5% is expected to be provided through the EU-EBRD Municipal, Infrastructure and Industrial Resilience Guarantee Programme. The Guarantee Programme is funded by the European Union under its European Fund for Sustainable Development (EFSD). Through this programme, the European Commission primarily engages in the energy transition of countries in the European Neighbourhood South and European Neighbourhood East by supporting energy efficiency and green technologies investments to support decarbonisation paths and the accomplishment of sustainable development goals. Additionally, it also supports borrowers which have been negatively impacted by either the COVID-19 pandemic or, more recently, the military conflict in Ukraine.
In addition, a first loss risk guarantee of 5.5% under the Shareholder Special Fund Risk Sharing Programme will be provided for this loan [subject to Board approval]. On the basis of both guarantees, total donor guarantee will cover 50% of the loan amount.
Company Contact Information
+38 (050) 411-43-67
63 Kyrylivska Street, Kyiv, 04080, Ukraine
PSD last updated
10 May 2022
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