Kryvyi Rih Industrial Gas LLC

Location:

Ukraine

Project number:

50276

Business sector:

Manufacturing and Services

Notice type:

Private

Approval date:

02 Sep 2020

Status:

Approved

PSD disclosed:

18 Jun 2020

Project Description

Provision of a long-term loan of up to USD 81 million to Kryvyi Rih Industrial Gas LLC (the "Company"), a Joint Venture with majority ownership by Air Products & Chemicals Inc., a company registered in the USA. Subject to finalisation of commercial agreements, the Company will design, construct and operate an on-site air separation unit (the "Project") to be located in Kryvyi Rih.

Project Objectives

The Project will employ modern, state-of-the-art technology to safely and reliably produce industrial gases, for ArcelorMittal's Kryvyi Rih steel works and other customers in Ukraine and beyond.  By replacing existing industrial gas production on ArcelorMittal's site, the new facility will reduce the annual energy consumption of the steel plant. 

Transition Impact

ETI score: 65

ETI score: 65

The transition impact of the proposed Project will derive from emission reduction and energy efficiency objectives under the Green quality. The air separation unit will be designed in line with the European Industrial Gas Association technological guidelines and will be among the first of its kind to be installed in Ukraine. The Project is expected to result in CO2 emission savings in excess of 60,000 tonnes per annum through energy efficiency gains of the steel works.

Client Information

KRYVYI RIH INDUSTRIAL GAS LLC

Kryvyi Rih Industrial Gas LLC is a joint venture with majority ownership by Air Products and Chemicals, Inc., a company registered in USA.

EBRD Finance Summary

USD 81,000,000.00

The EBRD to provide up to USD 81 million senior loan with the proceeds to be used to finance the construction of the air separation unit.

Total Project Cost

USD 116,000,000.00

Estimated to be in excess USD 100,000,000.00

Additionality

EBRD support is additional because it offers a tailored financing necessary to structure the Project, while its long-term relationship with the investors and end-users provides comfort by mitigating political risks and enabling technological innovations.

Environmental and Social Summary

Categorised B (2014 ESP). Environmental and social (E&S) impacts associated with the Project are site specific, and readily identified and addressed through well-defined mitigation measures.

The Company will construct and operate a new air separation unit (ASU) at the existing steel works of ArcelorMittal in Kryvyi Rih (AMKR), Ukraine. The current Project is aimed in part at replacing old installations and is part of a complex modernization of the steel plant to secure AMKR steel production as per strategic plan. Environmental and social (E&S) impacts associated with the Project are site specific, and readily identified and addressed through well-defined mitigation measures.

In-house ESDD has been undertaken of the ASU Project to review the planned designs, construction and operation procedures, as well as to review the permits and other regulatory requirements associated with the Project. The new ASU unit is located within the AMKR complex and will have limited impact on sensitive receptors. It is located away from residential areas, will have limited social impacts, and will not be associated with resettlement.

The ongoing ESDD confirmed that the investors, and subsequently the Company, have the capacity to implement the Bank's PRs through well-developed EHS and HR systems. Environmental, Quality, Energy and occupational health and safety issues will be managed through systems certified to ISO 14001, ISO 9001, ISO 50001 and ISO 45001 standards. The necessary resources and capacities are in place to implement the aforementioned systems.

In terms of environmental performance, the proposed technology will be amongst the best available in the sector. The Company will operate in line with both the Ukrainian National requirements and in line with the EU European Industrial Gas Association guidelines and relevant  EU Best Available Techniques (BAT as appropriate); and will attain improved energy efficiency and lower emissions. The Company will undertake an Environmental Impact Assessment (EIA) for the investment and obtain the relevant permits from Competent Authorities prior to start of construction. The site itself is located within the existing ArcelorMittal steel works to which the Bank has provided financing in the past (DTM 47584) and the steel plant is implementing the agreed Environmental and Social Action Plan (ESAP) aimed to ensure compliance with National and EU environmental standards, and best industry practises.

The Bank will monitor the Project implementation through monitoring visits and reports issued until the construction completion.

Non-Technical Summary (NTS) attached.

Technical Cooperation and Grant Financing

None

Company Contact Information

Volodymyr Yarmola
yarmolv@airproducts.com
Telephone:+38 044 489 9722
Fax: +38 044 489 9743
www.airproducts.ua
53-B Geroyiv Stalingradu, office 2, Kyiv 04213, Ukraine

PSD last updated

06 Oct 2020

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 how to submit a Request for review through our confidential online form, by emailmail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.

 

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