KGHM PLN Bonds

Location:

Poland

Project number:

51062

Business sector:

Natural resources

Notice type:

Private

Environmental category:

B

Approval date:

19 Jun 2019

Status:

Signed

PSD disclosed:

19 Jul 2019

Translated version of this PSD: Polish

Project Description

Investment in Polish zloty-denominated bonds for an amount of PLN 400 million (EUR 93 million) as part of a total aggregate issuance of PLN 2 billion (EUR 466m) by KGHM Polska Miedz S.A. ("KGHM" or the "Issuer"), a public company incorporated in Poland.

Project Objectives

The proceeds from EBRD investment will finance projects which will result in improved energy efficiency and reduced CO2 emissions where saving are expected to be over 61 thousand tonnes per year. All the investments are consistent with the Bank's Green Economy Transition Approach. In addition, the transaction will contribute to further development of the capital market of the country.

Transition Impact

Primary Quality - Green - the project is expected to result in improved energy efficiency and reduced CO2 emissions. This is expected to derive from the implementation of a capex plan that includes replacement of mills and crushers, refurbishment of the two existing CHPs and construction of a new CCHP plant.

Secondary Quality - Resilient - the project supports capital market development through its large size and long maturity in comparison to the market norm.

Client Information

KGHM POLSKA MIEDZ SA

KGHM Polska Miedz S.A., incorporated in Poland, is a parent company of the KGHM Group which is one of the largest copper producer in the world involved in exploration, mining and processing. KGHM was established in 1957 with the discovery of one of the world's largest deposits of polymetallic ores in Poland. KGHM is listed on the Warsaw Stock Exchange since 1997.

KGHM is one the biggest companies in Poland and the only copper producer in Poland, with domestic market accounting for 26% of the Group's revenue followed by China, Germany and UK.

EBRD Finance Summary

PLN 400,000,000.00

Total Project Cost

PLN 2,000,000,000.00

Environmental and Social Summary

Categorised B under the 2014 ESP. The Bank's Environmental and Social Due Diligence (ESDD) was subject to capital market rules and an ESDD was based on publicly available information and meetings with KGHM. The ESDD confirmed that KGHM has the institutional capacity to implement the Bank's Performance Requirements (PRs) and is a leading mining company in the region implementing best international practices. The ESDD also confirmed that the use of proceeds will not lead to an expansion of the mining operations and the use of proceeds will be used mainly for modernisation of the mining activist and specific energy efficiency investments. Based on the in-house due diligence it is viewed that KGHM is in compliance with National and EU legislation and has an EHS management system of a high standard, which is aligned with the Bank's Performance Requirement. The Company is developing and implementing a corporate Environmental, Social and Governance (ESG) Polices and EU BAT environmental standards as well as best practices for the mining industry. KGHM is currently developing a program to address some historic contamination at the smelters and to further reduce emissions and energy use. KGHM publishes an annual CSR report which is available online (https://kghm.com/en/sustainable-development/reports-and-resources)  and includes an overall assessment of environmental and social impacts and future investments. A framework agreement will be signed with KGHM with a commitment to continued compliance with National legislation as well as the Bank's PRs.

Technical Cooperation

None.

Company Contact Information

Piotr Paszko
piotr.paszko@kghm.com
+48 76 7478 142
https://kghm.com/en

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

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Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

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