DFF - Ukroliya Loan

Location:

Ukraine

Project number:

52528

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

10 Aug 2021

Status:

Approved

PSD disclosed:

14 Aug 2021

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The project consist of financing the Company's capital expenditures and working capital needs and balance sheet restructuring.

Project Objectives

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.

Transition Impact

ETI score: 70

Quality: Inclusive

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.

Quality: Green

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.

Client Information

UKROLIYA LLC

Ukroliya LLC and Ukroliyaproduct ARC (the "Co-Borrowers") together form Ukroliya Group, a Ukrainian producer of sunflower oil.

EBRD Finance Summary

EUR 16,000,000.00

Total Project Cost

EUR 16,000,000.00

Additionality

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

Maryna Tertytska
post@ukroliya.com
+38 0532 64 20 40; +38 0800 50 30 90
https://www.ukroliya.com
4 Sadova St, Chernechyi Yar village, Dykanka district, Poltava region, Ukraine, 38521

Implementation summary


PSD last updated

14 Aug 2021

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 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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