RF - Alu Menziken - Working Capital

Location:

Romania

Project number:

52179

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

11 Aug 2020

Status:

Approved

PSD disclosed:

03 Sep 2020

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 secured working capital facility of up to EUR 5 million to support the Company's working capital needs.

The Project was approved under the Bank's response to the Covid-19 pandemic. To avoid delays to the delivery of this project, the Bank's President granted a deviation from the ordinary timelines for PSD disclosure, as contemplated by Section V of the Directive on Access to Information. Details of the Bank's response to Covid-19, and this deviation, can be found on the EBRD website.

Project Objectives

The financing facility will support a private sector company operating in the manufacturing industry in Romania.

The purpose of the facility is to support operational activity, assist the company in succesfully procuring raw materials in a timely manner at the time of recovery, and alleviate Covid-19 related liquidity pressures caused by i) expected lower sales ; ii) additional expenses and costs ; iii) volatility of payables and receivables.

Transition Impact

75. The Transition Impact (TI) rationale is to preserve the transition impact gains achieved through the existing transactions with the Borrower and to further support the Company to remain a leading player in its sector and the region, as well as to continue implementing the TI benchmarks agreed at signing:

  • Inclusive: strengthen the experience and knowledge base of staff in technical roles and of youth, through the implementation of various certified training programs in collaboration with local universities/technical colleges and work-based training opportunities;
  • Green: strengthen energy efficiency improvements and expansion of the recycling of aluminium scraps produced both internally and externally. 

Client Information

ALU MENZIKEN SRL

Alu Menziken SRL (AME) is a limited liability company incorporated in Romania and 100 per cent ultimately owned by Montana Tech Components AG (MTC, or the sponsor).

AME first became the EBRD's client in 2017, through the extension of a EUR 25 million senior secured loan with a 7-year tenor to finance the construction of a greenfield aluminium plant.

EBRD Finance Summary

EUR 5,000,000.00

Total Project Cost

EUR 5,000,000.00

Additionality

EBRD financing is provided in the extraordinary circumstances of the Covid-19 crisis. Specific triggers for the Enhanced Additionality Approach will not apply.

Additionality sources

Covid-19 crisis response: The EBRD's financing alleviates liquidity pressure which arose as a result of the disruptions caused by the Covid-19 pandemic.

Additionality description

The aeronautics and automotive industries are two of the most severely disrupted industries by the Covid-19 pandemic, with supply chain disruptions and orders from Original Equipment Manufacturers (OEMs) postponed. This situation negatively impacted the Borrower's cash position - there is a risk that AME's decreased liquidity will negatively affect its solvability, as well as its ability to continue its opex/capex plan. As the Borrower's unique provider of crisis-response financing, the Bank is undoubtedly additional by providing a cushion to limit both the short-term and long-term impact of the Covid-19 pandemic.

Environmental and Social Summary

The Project has been categorised B (ESP 2019), low-medium risk based on knowledge of the Client's operations and capacity to carry these out in line EBRD performance requiremnets as demonstrated over a number of past projects. The Environmental and Social Due Diligence (ESDD) for this Resilience Framework project raising working capital was done in line with the EBRD Environment and Sustainability Department's Covid-19 approach and was based on in-house ESDD carried out for the previous transaction in 2017, and a review of the comprehensive annual environmental and social reports (AESR) for 2019 which included an Environmental and Social Action Plan (ESAP) implementation update. There is no Green Economy Transition (GET) component in this Project.

As part of Montana Group, the Company has implemented a set of protective procedures and safety measures for their staff and the public based on their Covid-19 Procedure developed in line with advice of the World Health Organisation and the Romanian Government, and regularly updated to address changing circumstances. The ESDD has confirmed that the Company has well established environmental and social capacities and management systems that are aligned to ISO 14001 and ISO 45001, respectively the environmental and occupational health and safety standards. This greenfield aluminium billets plant started its operations in June 2019, and so far only reached 60 per cent of its nominal capacity with a slowdown in 2020 due to pandemic impacts on the sector.

Technical Cooperation and Grant Financing

N/A

Company Contact Information

Benedikt Wolfram
Benedikt.Wolfram@alu-menziken.com
0040 261 84 74 74
alu-menziken.ro
793, Medieșu Aurit, Romania

PSD last updated

03 Sep 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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