Premier Energy working capital loan under RLF

Location:

Romania

Project number:

53854

Business sector:

Energy

Notice type:

Private

Environmental category:

B

Approval date:

06 Sep 2022

Status:

Signed

PSD disclosed:

04 Aug 2022

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

A senior secured working capital revolving loan of up to EUR 30 million to Romania's Premier Energy SRL, to finance the increased value of gas contracts (inventory) caused by the gas price surge that was triggered by the war in Ukraine.

The transaction is presented under the EBRD's Resilience and Livelihoods Framework, one of whose focus areas is energy security in Ukraine and affected countries.

Project Objectives

Financing of working capital needs of the company in order to ensure the uninterrupted provision of vital energy services ahead of the upcoming heating season.

Transition Impact

ETI score: 65

Resilient: The project contributes to ensuring Romania's energy security by extending the working capital facility to (1) finance the increased value of gas contracts (inventory) on the back of the gas price increases caused by the war in Ukraine and the sanctions against Russia, and (2) to meet its minimum 30% gas storage level obligation for coming winter in order to ensure continuity/safety of supply and price affordability for its end clients.

Inclusive: The project will provide an emergency facility to prevent gas supply disruptions and maintain a reliable supply of vital energy services in advance of the main heating season for both the Romanian population and Ukrainians refugees, predominantly women, children and elderly.

Client Information

PREMIER ENERGY SRL

Premier Energy SRL, a private gas distribution network operator and gas supplier established in Romania, is ultimately owned by Premier Energy PLC, a holding company incorporated in Cyprus, which owns gas and electricity infrastructure companies operating in Moldova and Romania.

EBRD Finance Summary

EUR 30,000,000.00

Total Project Cost

EUR 30,000,000.00

Additionality

The EBRD financing effectively bridges a financing gap due to adverse market conditions and the company seeks use of EBRD expertise on adopting higher environmental standards, including adoption of Corporate Climate Governance Plan in the company's strategy.

Environmental and Social Summary

Category B, under ESP 2019. Environmental and social impacts associated with client activity can be readily identified and addressed through appropriate mitigation measures. Environmental and Social Due Diligence (ESDD), undertaken by ESD staff, was based on the review of the completed ESDD Questionnaire, the company's 2021 annual corporate social responsibility report and their statement on commitment to a sound working environment, as well as follow up with the client. The ESDD showed that the client has adequate environmental and social risk management capacities and the project is not associated with significant environmental & social impacts. To ensure the project's is structured to meet the EBRD PRs, a concise ESAP has been developed and will be agreed with the client prior to the Board. The client is required to ensure that the project complies with the EBRD PRs as well as submit an annual ES report to the Bank.

The ESDD showed that the company publishes a group-level annual report in line with the Global Reporting Initiative as well as the Sustainability Accounting Standards. The company is publicly committed to sustainability and publishes analysis of their business operation in accordance with 2030 SDGs. The group is seeking to be one of the regional leaders in the transition to green energy with a clear strategy to grow its renewable portfolio in line with sustainable growth and decarbonisation efforts. The group is committed to reducing net carbon dioxide (CO2) emissions to zero by 2050, in line with the "Business Ambition for 1.5dC" initiative of the United Nations and other international organizations. Their Human Resources (HR) policies include an employee grievance mechanism and occupational, health & safety policies in line with EBRD PR2 and PR4. The company reported that there were no material accidents at the group level in 2021. The company holds certified management systems for environmental, health and safety and quality and are in process of development of energy management system. The ESAP addresses management of third party and supply chain risks by incorporating environmental & social legal requirements as well as ESG Policy and Code of Ethics in bidding and contract documents as well as monitoring their compliance. The Bank will monitor the project's environmental & social performance by reviewing an annual ES report and site visit if deemed necessary.

The project is considered aligned with Paris Alignment for mitigation, provided that the company will develop and commit to a decarbonisation strategy based on the PA methodology and in line with the fossil fuels approach. This action will be also incorporated in the ESAP. The project is considered Paris aligned for climate adaptation and the PC risk score is 1, meaning that the CART is not considered to be materially exposed to physical climate risk. There is no GET component associated with this project.

Technical Cooperation and Grant Financing

The EBRD will support the company to enhance its corporate governance for effective climate action and develop a low-carbon and climate-resilient roadmap which includes developing a Climate Corporate Governance (CCG) action plan, developing the company's net-zero target (including Scope 3 emissions) by 2050 and providing training and implementation support to ensure successful integration of CCG priority enhancements into the company's business operations.

Company Contact Information

Iuliana Panescu
Iuliana.panescu@premierenergy.ro
+40 (21) 231 1021
http://www.premierenergy.ro
Landmark Building A 11th Constantin Daniel street, 4th Vasile Alecsandri street 2nd floor, 1st District, Bucharest, Romania

Implementation summary


PSD last updated

04 Aug 2022

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

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

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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