Provision of a senior loan of up to USD 7m (EUR 5.9m) in favour of Albchrome Sh.p.k. (the "Company"), a limited liability company incorporated in Albania. The loan will provide medium-term liquidity support to tackle the impact of COVID 19.
The financing will enable Albchrome to stock up on inventories of key raw materials and increase operational efficiency, improve performance and reduce the costs of production.
ETI score: 60
(i) Resilient - The project entails addressing current liquidity shortages of the company resulting from the economic imoact of the COVID 19 pandemic;
(ii) Well-governed - The company will develop a climate change roadmap for effective climate action, adopting best international practices on corporate climate governance (i.e. aligning business operations with low-carbon and climate-resilient pathways).
Albchrome is the largest and only vertically integrated chrome ore and ferrochrome producer in Albania, owned by Balfin Shpk ("Balfin") or the "sponsor". Balfin is one of the largest business groups in the country with interests in retail, property development and mining.
EBRD Finance Summary
Total Project Cost
(i) Financing Structure: EBRD offers liquidity support to bridge a financing gap due to adverse market conditions;
(ii) Standard-setting: the client will use EBRD's expertise on higher environmental standards.
Environmental and Social Summary
Categorised B (2019 ESP). The environmental and social due diligence (ESDD) was carried out by an independent consultant in accordance with ESD Covid19 guidelines; it included the review of an information package supplied by the client and site visits (by a local team due to COVID-19 travel restrictions) of the two smelters and the underground mine. The Environmental and Social (E&S) risks and impacts associated with providing a working capital loan for the operation of two existing ferrochrome plants are readily identified and will be managed by the implementation of a robust Environmental and Social Action Plan (ESAP). The main E&S risks are related to air emissions from the smelters (and overall alignment with Best Available Techniques) and occupational health and safety (especially for the underground operations). These risks will be managed through the ESAP which was discussed and substantially agreed with the client.
Albchrome has a structure in place to ensure compliance with the national regulation. All permits have been obtained for the current activities in Albania. The ESAP requires the development of an integrated health, safety, social and environmental (HSSE) management system (including risk management for suppliers and contractors) and appointment of HSSE officers at Corporate and site levels. Albchrome has written human resources policies to manage the workforce in accordance with national requirements. A collective agreement is in place in the three production units and 96% of the total employees are reported to be members of the Union. Random worker interviews conducted during ESDD site visit showed that workers were satisfied with salary and the long-term nature of the job. A formal employee grievance mechanism will be developed as required in the ESAP. The review of the COVID-19 questionnaire confirmed that Albchrome is not planning salary cuts nor dismissals, and that measures are in place to limit the spread of COVID-19 (as per national guidelines). Should significant labour restructuring take place, the client would be required to ensure that any such measures be conducted in accordance with PR2 and with advance notification to the EBRD.
The ESAP requires i) the installation of dust abatement systems at both smelters , ii) the development and implementation of an Action Plan to ensure alignment with the BAT, iii) reinforcement of monitoring protocols (air, health, noise, water), iv) assessment of greenhouse gas emissions, v) leaching tests of the slag. In relation to occupational health and safety, several improvements are needed as captured in the ESAP, such as carrying out an industrial hygiene assessment at the main working areas and improving the conditions of the emergency underground mine rescue stations (refuge chambers), as well as conducting an external audit on Occupational Health and Safety for both smelter units and the mine. There is no need to acquire additional land for the Project. Albchrome operations are not located close to any recognized archaeological site nor protected area for biodiversity. The ESAP requests the recruitment of a Community Liaison Officer and the implementation of the Stakeholder Engagement Plan (including a community grievance mechanism). Albchrome will publish yearly summary results of environmental and social performance on their website.
Due to the sector and risks identified during ESDD for the Albchrome project, the Bank will monitor closely the implementation of the ESAP, through review of annual Environmental and Social Reports (AESR) as well communications with the Company and site visits as necessary.
Technical Cooperation and Grant Financing
EUR 81,000 for environmental and market due-diligence, funded from the Shareholder Special Fund (Western Balkans).
Company Contact Information
+355 4 22 42 938
Rr. "Dervish Hima", Pallati Ambasador 3, Kati 1, Nr.3 Tirana, Albania
PSD last updated
24 Mar 2021
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More information on the EBRD’s practices in this regard is set out in the ESP.
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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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