eMAG - Loan 1

Location:

Romania

Project number:

52474

Business sector:

Telecommunications, Media and Technology

Notice type:

Private

Environmental category:

B

Approval date:

10 Mar 2021

Status:

Disbursing

PSD disclosed:

09 Mar 2021

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

1.  A senior loan in amount of up to EUR 18.5 million ("Loan 1") to eMAG Operations SRL (the "SPV"), as part of a syndicated loan of EUR 37 million, to finance the development of a logistic centre ("DC2") to be used by Dante International SA ("eMag"). 

2. A senior loan in the amount of up to EUR 17.5 million as part of a syndicated loan of EUR 35 million to be granted to the Dante International SA ("Dante"), to finance the acquisition of state of the art technology and equipment to enable the automation in DC2 logistic centre ("Loan 2").

Project Objectives

The operation will enable eMAG Group, a key e-commerce player in Romania, to develop a new energy efficient logistic center that will support competitiveness improvements and enable the company's commercial expansion. The transition impact of the project is coming from the "Competitive" and "Green" qualities. The company has committed to seek BREEAM green building certification for the project.

In EBRD countries of operations, the online industry has become decisive in cushioning the impact of the Covid-19 pandemic and associated lockdown measures. By supporting the development of the Group, the project is strongly aligned with the Bank's commitment to support countries where it invests to mitigate the economic impact of the pandemic.

Transition Impact

ETI score: 64

The transition impact of the project is related to "Competitive" and "Green" qualities.

Primary Quality - "Competitive": The operation will directly finance state of the art logistics technology and equipment that will support efficiency improvements and further engagement with local SMEs.

Secondary Quality - "Green": The Project will support the introduction of energy efficiency measures at the new logistic centre and the achievement of BREEAM green building certification.

Client Information

EMAG OPERATIONS SRL

Dante International SA trades under the brand name of eMAG and consolidates all Romanian operations and together with the other operating companies in Bulgaria and Hungary represent the eMAG Group. 

The company was founded in 2001 and is based in Bucharest, Romania. eMAG is a pioneer of the Romanian online commerce market with a significant presence in Bulgaria and Hungary where it connects customers, suppliers and entrepreneurs across all the countries where it operates.

Dante International SA is owned 80.08% by Prosus N.V. (which is majority owned by Naspers Ltd) and 19.92% by Mr. Iulian Stanciu, also the CEO of the company. eMAG Operations SRL, 99.98% owned by Dante, is a newly established project company for the purpose of developing and operating DC2.

EBRD Finance Summary

EUR 18,500,000.00

eMAG - Loan 1: up to EUR 18,500,000

eMAG - Loan 2: up to EUR 17,500,000

Total Project Cost

EUR 58,000,000.00

eMAG - Loan 1:

Sources Total: 58,000,000.00

EBRD financing: EUR 18,500,000

 

eMAG - Loan 2:

Sources Total: 50,000,000.00

EBRD financing: EUR 17,500,000

Additionality

The EBRD's role is instrumental in obtaining commitment from local commercial banks to join the syndicated facility, while closing the remaining funding gap. The EBRD also contributes to increasing the client's environmental standards in the new logistic centre and support the achievement of BREEAM certification rated 'Very Good'.

Environmental and Social Summary

Categorised B (2019 ES)  Environmental and Social Due Diligence (ESDD) has been carried out internally and consisted in a review of the completed ESDD Questionnaires and follow up communication with the company. The ESDD showed that the company is in compliance with national law and has adequate Environmental and Social (E&S) risk management capacities to implement the project in compliance with EBRD Perfromance Requirements (PRs). E&S issues associated with the site of the warehouse construction and operation are limited and can be addressed by standard mitigation measures stipulated in a concise Environmental & Social Action Plan (ESAP) to be agreed by the company prior to the project discussion at the EBRD's Board meeting. For the project, the company will be required to comply with EBRD PRs as well as provide annual E&S reports to the Bank.

The ESDD was based on the reviews of the Corporate, Site-specific, Covid-19 and Traffic & Road Safety Questionnaires.  It showed the following: the Company's operations are accredited with ISO14001 & ISO9001 and is currently developing a sustainability strategy including transition to electric vehicles, planting trees near the company's warehouse and installation of photovoltaic panels. It also publishes a Romanian non-financial report. The Company's HR & OHS policies are in line with PR2 & PR4 with an employee grievance mechanism and recognition of employees' right to organise. The company assesses its contractors' E&S compliance. To response to Covid-19, the company has carried out workplace risk assessment and obtained DEKRA certification for its responses in compliance with national requirements and in line with WHO guidelines. No retrenchment is planned or has taken place as a result of the pandemic.

Regarding the new warehouse construction site, land was formerly used for agricultural purposes and was purchased on a willing buyer/willing seller basis. This land was not subject to past contamination and there are no known public concerns, cultural heritage or biodiversity impacts. The project is in compliance with the urban development plan with construction permits. Water will be provided by wells, and waste water will be sent to sewerage systems. Waste will be collected by a licensed waste management company.

The building will be fitted with automated fire detective systems and sprinklers system in accordance with the NFPA 13 and FM Global (commercial property instance). An ESAP will be developed for the project and agreed with client prior to the project discussion by the EBRD Board. It will focus on labour & HR issues as well as the development of a community grievance mechanism during the construction & operation of the warehouse. The Bank will monitor the project's E&S performance by reviewing annual E&S reports as well as conducting a site visit if deemed necessary. 

Company Contact Information

Claudia Covaci
pr@emag.ro
0040212005200
www.emag.ro
Sos. Bucuresti Nord 15-23, Swan Office Park, Windsor Building, Bucharest

PSD last updated

09 Mar 2021

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

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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).

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 more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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