LG Chem

Location:

Poland

Project number:

51025

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

24 Jul 2019

Status:

Disbursing

PSD disclosed:

25 Nov 2019

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

Provision of a long-term loan of up to EUR 250 million to LG Chem Wroclaw Energy sp.z o.o (the "Company"), a fully owned subsidiary of LG Chem, Ltd, for the construction of a Lithium-Ion battery factory for Electric Vehicles in Wroclaw, Poland (the "project"). 

Project Objectives

The project supports LG Chem's investment plan to construct a Lithium-Ion battery factory in Wroclaw, Poland, in order to produce and supply EV batteries to the Original Equipment Manufacturers (OEMs).

Transition Impact

ETI score: 80

The transition impact of the proposed project will be derived from Green quality. The Project is expected to result in major CO2 emission savings from energy efficiency gains of Green product (Electric Vehicles batteries) replacing conventional Internal Combustion Engines.

Client Information

LG CHEM WROCLAW ENERGY SP ZOO

LG Chem Wroclaw Energy sp.z o.o is owned by LG Chem, Ltd of South Korea, one of the global leading petrochemical companies.

EBRD Finance Summary

EUR 250,000,000.00

Total Project Cost

EUR 1,040,000,000.00

Environmental and Social Summary

Categorised B (2014 ESP). The Environmental and Social Due Diligence (ESDD) concluded that the environmental and social (E&S) impacts associated with the Project are site specific, and readily identified and addressed through established mitigation measures. The Company operates a world class manufacturing facility in an existing industrial zone at the outskirts of the city of Wroclaw (Poland) and is compliant with the Bank's Performance Requirements (PR) through implementation of corporate management systems and adherence to EU and Polish environmental and labour laws. An in-house ESDD was undertaken to review current operations and this included a site visit to the company's manufacturing and assembly site in Wroclaw, interviews with EHS and HR management teams. An additional review of the permit and other local regulatory requirements including the EIA for both existing plants as well as the expansion projects was also undertaken.

The ESDD concluded  that the Company has  a well-developed EHS and HR systems, and the capacity to fully implement the Bank's PRs. Environmental and occupational health and safety issues are managed through an integrated management system (IMS) certified to ISO 14001 and OHSAS 18001 standards at all operations. The necessary resources and capacities are in place to implement the IMS.

In terms of environmental performance, the Company operates in line with the requirements of Polish Regulatory Framework, which is complaint with EU Environmental Directives. The Company has undertaken EIAs for the various stages of investment and obtained relevant permits from Competent Authorities. The site itself is located within a large industrial zone, and a number of companies located in the near vicinity share the same infrastructure, such as a storm-water system and access roads.

The Company is implementing EU waste directives and is also developing a circular economy strategy to ensure ongoing compliance. In the longer term the company will develop a waste recovery system to help with the replacement of old batteries. LG Chem in Wroclaw employs a total staff of approximately 3,000 people. The Company has implemented a corporate HR polices which include systematic HR audits to address potential labour issues.

Technical Cooperation and Grant Financing

NA.   

Company Contact Information

Ryan YS Yang
ysyang@lgchem.com
https://www.lgchem.com/global/main

PSD last updated

27 Jan 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
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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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