Project Description
A EUR 75 million participation in the long-term tranches of an ESG-linked Schuldschein by Valeo SE (the "Company"), a Societas Europaea incorporated and existing under the laws of France. The Bank's proceeds will support the Company's investments in Egypt, Tunisia and Turkiye.
Project Objectives
The project will support Valeo's R&D efforts in Egypt as well as its green initiatives in Turkiye, contributing to achieving carbon neutrality by 2050. In particular, the use of proceeds will support: (i) the Group's R&D center in Egypt for developing software for Electric and Hybrid Vehicles, the site develops 50% of the Group's software production worldwide exporting 100% of its services across the globe; (ii) production of components for hybrid/electric vehicles (EVs) in Turkiye; and (iii) new capex in Tunisia to build a greenfield plant.
Transition Impact
ETI score: 66
Primary quality - Competitive:The EBRD proceeds will support the R&D center/Innovation Car Lab in Egypt which develops software for Electric Vehicles (EVs) and hybrid vehicles i.e. green R&D.
Secondary quality - Green: The Project has an 87% GET share, supporting the Company's decarbonisation activities and targets through transitioning to e-mobility by enabling the increased production of components for EVs, starting form their R&D in Egypt to their manufacturing in Turkiye. The sustainability linked KPI for the Schuldschein at the group level is 37.95 CO2eq million tons for the financial year ending on 31 December 2025 (compared to 2019 baseline).
Client Information
VALEO SE
Valeo is a tier-1 automotive supplier designing innovative solutions for smart and sustainable mobility, with a particular focus on intuitive driving and reducing CO2 emissions, through its production facilities and research & development centres in 31 countries.
EBRD Finance Summary
EUR 75,000,000.00
Total Project Cost
EUR 266,000,000.00
Additionality
Financing structure - Capital market. Egypt, Tunisia and Turkiye are all suffering from adverse economic conditions and net FDI has been declining. EBRD's participation is therefore important to support Valeo's commitments and long term investments in these countries.
Standard-setting - Gender Additional. The Company has committed to doubling its share of women on management committees from 16% to 32% by 2030, as well as to increasing its 'Gender Equality Index' an internally-defined composite benchmark of performance on equality between women and men, looking into outcomes around workers' pay, career progression and other features from 82% in 2019 to 90% by 2025, applied across Valeo's plants, including in Egypt, Tunisia and Turkiye.
Environmental and Social Summary
Category B (2019 ESP). The proceeds will be used between Egypt, Tunisia and Turkiye to support including the Group's R&D centre in Egypt for developing software for EVs and hybrid vehicles, new capex in Tunisia to build a greenfield plant, and production of components for hybrid/electric vehicles in Turkiye. Valeo has 184 plants, 16 distribution platforms, 103,300 people working in 31 countries (at end Dec 2021). Environmental and Social Due diligence in this capital markets transaction is limited to publicly available documents which include 'Valeo Activity and Sustainable Development Report 2020-2021', 'Climate Report 2021', 'Valeo Sustainable Financing Framework Report', and 'Second Party Opinion' issued by ISS ESG dated 2021.
As a result of the ESDD, ESD concludes that all of Valeo's environmental and social policies and procedures result in their current operations being compliant with the EBRD's ESP 2019 PRs. Given this framework and the clear commitment to national compliance and good international practice, no additional actions will be required of the Company and an ESAP will not need to be agreed. The Company will be required to maintain compliance with the Bank's PRs and to provide the Bank with annual environmental and social reporting. ESD will review the external auditor's report of the annual performance on the KPIs.
Technical Cooperation and Grant Financing
N/A
Company Contact Information
Valeo Media Relations / Valeo Investor Relations
contact.mailbox@valeo.com / valeo.corporateaccess.mailbox@valeo.com
+33 6 67 88 89 33 | +33 6 81 73 83 41 | +33 1 40 55 37 93
https://www.valeo.com/en/
100 rue de Courcelles 75017 Paris, France
PSD last updated
02 Feb 2023
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
Business opportunities
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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.
