FEV UTAC Morocco

Location:

Morocco

Project number:

52680

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

23 Nov 2021

Status:

Disbursing

PSD disclosed:

24 Feb 2022

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 EUR 12 million senior loan with a maturity of 7 years (including 2 years of grace period). The proceeds will be used to support the equipment acquisition related to the setting-up of the first automotive test centre in Morocco (and Africa).

 

 

Project Objectives

FEV Group and UTAC Group are partnering to establish a joint-venture company (the "Borrower" or the "JV" or "ATC"), which will be the first automotive testing centre in Morocco (and Africa) with a comprehensive offering for various OEMs. Following the launch of Stellantis activities in Morocco in 2019 and the transfer of part of its gasoline powertrain development activities to Morocco, UTAC Group created UTAC Maroc, involved in the test tracks and other component testing and FEV Group created FEV North Africa, a company involved in the powertrain engineering and testing.

Under this JV, FEV North Africa and UTAC Maroc, each preserving their proprietary technologies, will have complementary businesses, where FEV North Africa will run its own powertrain test benches and chassis dyno and UTAC Maroc will be responsible for the test tracks and other component testing, together with events and training activities.

 

Transition Impact

ETI score: 66

Competitve: the project will support the establishment of the first large-scale automotive testing centre in Africa. By establishing the first large-scale automotive test centre in Morocco, the project will support deepening and extension of supply chains in the country. The testing centre will be certified with ISO 9001, ISO / CEI 17025, and ISO/CEI 17043. These certifications are typical for European automotive testing centres that work with major OEMs.  

Inclusive: The Company will create and deliver a training programme for young people living in Oued Zem (an under-served area of Morocco)

Client Information

Automotive test center (the "Borrower" or the "JV" or "ATC"), is a green-field company established in Morocco which is owned for 50% by FEV North Africa (ultimately owned by FEV Group, a German service provider involved in the vehicle and drive system development) and for 50% by UTAC Maroc (ultimately owned by UTAC Group, a European leader and expert in in-land mobility testing, homologation and certification services). 

EBRD Finance Summary

EUR 12,000,000.00

The proceeds of the Bank will finance the equipment acquisition related to the testing centre to be operated by the Borrower

Total Project Cost

The total project financing will include the Bank's loan, Sponsor contributions and internal cash flow generation. 

Additionality

The Bank is additional through a financing structure which is not easily available in the market and which is required to structure the project and the long tenor of the EBRD loan (denominated in EUR) which is necessary to match the profitability cycle of the greenflield ATC capex with higher initial risks and long pay-back term.

Environmental and Social Summary

Categorised B (2019 ESP). The Environmental and Social (E&S) risks and impacts associated with construction and operation of a greenfield automotive testing center have been readily identified. In-house due diligence was carried out by means of review of a questionnaire and information package supplied by the Client, and follow-up Q&A with management interviews. The results of the ESDD indicated that E&S standards from both Sponsors will apply to the new Company, and the new Company will have the internal capacity to operate in line with the Performance Requirements, with the support of the two Sponsors. The ESAP has been agreed with the Client.

 

The Company (ATC) is committed to develop an integrated management system and obtain ISO 14001 and ISO 45001 certifications six months after the start of production. Main procedures currently in place in FEV and UTAC Groups will be replicated in Morocco at ATC level, as confirmed in the ESAP. These procedures include supply chain management (referencing questionnaire including HSE questions before selection of a new supplier, yearly assessment of existing supplier, Code of Conduct for suppliers) and Code of Ethics for staff.

The Company will develop a HR Policy in line with PR2 (including a GBVH component), as well as an employee grievance mechanism, as required in the ESAP. The Sponsors have conducted a benchmark in order to analyse the wages of companies operating in Moroccan automotive sector and concluded that the ATC proposed wages have a similar level.

The automotive testing center is located on an ancient phosphate mine (dated 1950's). The site (455ha) is owned by OCP and rented to ATC. Although the ongoing construction is under OCP's responsibility (and conducted in line with OCP's HSE standards), ATC participate to weekly site meetings and receive copies of minutes. No safety incident was reported to date. According to the Sponsors, there was no site user at the start of the Project.

A soil study was conducted in 2020 in order to assess the soil contamination levels due to previous mining activities. It identified some contaminated areas, which will be cleaned by OCP before the start of operations, as confirmed in the ESAP. Any additional contamination identified at the end of the long-term lease contract would be the responsibility of ATC. Electricity will be supplied from the national network. Fuel will be used to test the vehicles (45t/m); the facility will include a fuel filling station, storage tanks for diesel (160m3) and 50 special fuel tanks (0.2m3 each). The underground tanks as well as underground pipes will be made of double-wall stainless steel with leakage detection. ATC will nominate a responsible person for hazardous materials management, as captured in the ESAP. The ESAP also requires that for wetting of the wet test track (approx. 6,000m3/y), ATC do not use drinking water but rather recycled water from adjacent industrial sites. Emissions from exhaust gases by engine tests are estimated to be 1,650t/y CO2.

 

The Bank will monitor implementation of the additional ESAP through review of annual Environmental and Social Reports (AESR) and communications with the Company as necessary.

Technical Cooperation and Grant Financing

N.A

Company Contact Information

Stephanie Azuelos
stephanie.azuelos@utac.com
Autodrome de Linas-Montlhéry - BP 20212 - 91311 Montlhéry Cedex France

PSD last updated

24 Feb 2022

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.

 

Share this page: