The project consist of financing the Company's capital expenditures and working capital needs and balance sheet restructuring.
The main objective of the project is to support the Company's growth plans and its strategy to expand further in more profitable, premium (organic and high-oleic) and value-added (bottled and refined) sunflower oil sub-segments.
ETI score: 70
As part of the project, the Company will set up an accredited in-house training centre, in collaboration with local education partners, which will support the Company in meeting its skills needs and provide training opportunities for people in the Poltava region of Ukraine.
The project will support modernisation of the Company's production facilities, including the installation of a biomass boiler and processes to reduce oil content in wastes and reprocess materials for filtering, as well as the increase in production of organic vegetable oil and purchases of organic oilseeds promoting sustainable land-use practices among local farmers.
Ukroliya LLC and Ukroliyaproduct ARC (the "Co-Borrowers") together form Ukroliya Group, a Ukrainian producer of sunflower oil.
EBRD Finance Summary
Total Project Cost
1) Financing Structure: EBRD offers financing that is not available in the market on reasonable terms (e.g. a longer grace period). Such financing is necessary to structure the project. 2) Risk mitigation: EBRD provides comfort to the Company to be willing to take on more risk and/or finance, enabling expansion into value-added product categories and new export markets. 3) Standard-setting: the Company will benefit from the EBRD expertise over energy and resource efficiency and climate resilience and higher inclusion.
Environmental and Social Summary
Categorised B (ESP 2019) and Low Medium Risk. Key environmental and social risks associated with the working capital and capex investments into the capacity increase of sunflower oil production include air emissions, water and waste management, social and labour issues, resource and energy efficiency. These are site-specific and can be addressed through the Environmental and Social Action Plan, which has been shared with the Company and will be agreed prior to the Loan Agreement signing.
An Environmental and Social Due Diligence (ESDD) has been undertaken in line with the ESD ESDD response to COVID-19 by an independent consultant under JECF programme and included visit to the manufacturing facilities and their environmental, health and safety (EHS) audit, an analysis of the potential environmental and social impacts associated with the CAPEX Project, review of the corporate EHS management systems and practices, current regulatory and permitting compliance, risk management procedures and capacity to deliver the Project in line with EBRD's PRs.
Due Diligence confirmed that the Company has in place generally appropriate procedures and measures to avoid and mitigate potential negative impacts typical for the industry, such as air emissions, water and waste management, fire and explosion safety, labour and social issues, although some areas for improvement have been identified and will be implemented by the Company through the ESAP. ESDD concluded that the Company is generally compliant with the local regulatory requirements. Additional measures will be required to bring the operation into compliance with the Bank's PRs.
Gaps identified during the ESDD were addressed by means of ESAP that has been presented to the Company and will be agreed prior to signing. These included, inter alia, improvements of water and wastewater management, emissions abatement, fire and explosion safety, implementation of the biodiversity measures due to plant location at the boundary of the Emerald site, as well as measures on compliance with ISO 14001/ 45001 requirement and EU BAT BREF standards for the industry, notably in terms of the grain dust emissions. The Company will be required to developed national EIA and obtain required governmental approvals and permits for the new facility.
As part of ESDD a project specific Non-Technical Summary (NTS) and Stakeholder Engagement Plan (SEP) were developed. The Company will be required to continue to provide the annual environmental and social reporting to the Bank to ensure on-going compliance with the Bank's PRs.
Technical Cooperation and Grant Financing
1) Inclusion TC to support the development of an in-house training centre. Funding source: SSF.
2) TC to cover external environmental & social and legal due diligences. Funding source: Japanese-EBRD Cooperation Fund (JECF).
3) Energy efficiency TC to develop low carbon pathway for the Company. Funding source: EU4Climate.
Company Contact Information
+38 0532 64 20 40; +38 0800 50 30 90
4 Sadova St, Chernechyi Yar village, Dykanka district, Poltava region, Ukraine, 38521
PSD last updated
14 Aug 2021
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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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