Provision of a long-term financing in the amount of EUR 24m, that will allow Velvet ("Borrower", "Client") to (i) install new state-of-the-art paper machine, as well as (ii) cogeneration plant (jointly referred as "Project").
It is the second project with EBRD after successful start up of very similar tissue machine in 2018.
The Project will allow the Client to remain a leading tissue manufacturer on the Polish market. The Project will also reduce Borrower's carbon footprint by switching to internal electricity generation from gas in co-generation plant.
ETI score: 67
The Project supports Company's (i) competitiveness, through support of innovative tissue paper production, as well as (b) foster Green Economy Transition, through reduction of exposure to carbon intensive electricity sources, due to switch to internal generation in gas-fired co-generation plant.
VELVET CARE SP ZOO
Velvet Care Sp. z o.o. ("Borrower", "Client") is a leading tissue manufacturer in Poland, with market share in the sector of 12% and 96k tons converting capacity and two base paper machines with 90k tons output.
At the beginning of 2020 the Company acquired 100% shares in Moracell in Czech to strengthen its present in Central Europe.
EBRD Finance Summary
The EBRD to provide EUR 24 million long-term financing.
Total Project Cost
The additionality of the proposed Project will be derived from: (i) EBRD financing effectively bridges a financing gap due to adverse market conditions resulting from Covid-19 outbreak; and (ii) EBRD expertise on adoption of emission standards, given construction of cogeneration plant, which is a first project of its kind for the Client.
Environmental and Social Summary
Categorised B (ESP 2019). The Bank financed the Company in 2016 and to-date the Company has been implementing the existing ESAP and providing satisfactory annual reporting. The current Environmental and Social due diligence (ESDD) was undertaken by ESD and an independent consultant taking into account travel and Health and Safety restrictions under COVID-19 and the Bank's internal guidance on due diligence.
The ESDD confirmed that the Company is compliant with National and EU legislation and has the institutional capacity to fully implement the Bank's Performance Requirements (PRs). The Company has a dedicated EHS manager and is certified to ISO 14001 and PN-N-18001:2004. The plant is not located in a sensitive area, close N2000 areas, and the site has a long manufacturing tradition, with much of the older production sites now demolished.
The new investment will increase capacity and also add a gas fired co-generation unit to the plant, which will improve overall efficiency of production. This is part of the Company's overall comprehensive program of modernization and working with the local community and local authorities as the facility provides wastewater facilities for the local community. The Company has a well-developed site specific stakeholder engagement plan (SEP) which forms part of a site specific social, environmental, health and safety management system.
The Company has made progress in addressing environmental liability issues (such as demolishing historic buildings) and has made significant investments in environmental abatement system and best practice at the plant. The Company no longer uses coal for steam and power generation or purchase steam from the neighbouring coal-fired boiler plant operated by a third party. The paper plant has a valid integrated permit, in line with the requirements of the Industrial Emissions Directive (IED), and are subject to regular inspection from the regulators. To ensure on-going compliance and the implementation of Best Available Techniques (BAT) in accordance with good international practice, the Company has made significant investments in technological and environmental upgrades, notably upgrading the wastewater plant, reducing fugitive emissions well as further energy and water efficiency measures. The new tissue paper production line will be designed to comply with IED and BAT. The new investment has also been permitted by the local Competent Authorities. This includes and Environmental Impact Assessment (EIA) in line with National and EU legislation. A Non-Technical Summary (NTS) and SEP have been developed for the Project and will be disclosed on the Company web site. A link to the NTS is enclosed below.
Based on the ESDD, the existing ESAP has been updated and is being agreed with the Company. This includes the need for continued implementation of the SEP and compliance with EU BAT derived environmental standards and long term energy efficacy and circular economy requirements. The Company will continue to further develop its ESG reporting in line with best practices. The Bank will monitor the implementation of the Project through review of annual reports provided by the Company.
Technical Cooperation and Grant Financing
EBRD will support the Client in exploring and a technical assessment of potential production of tissue from recycled fibres.
Company Contact Information
Artur Pielak - President
+48 22 461 27 10
Velvet CARE sp. z o.o. Klucze-Osada 3 32-310 Klucze
PSD last updated
06 Jul 2020
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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).
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