Project Description
Provision of a USD 25 million two-year working capital loan (the "Loan") to United Metals Company (the "Borrower" or the "Company") to support the Company's working capital needs amidst the COVID-19 pandemic.
Project Objectives
Support the working capital requirements of the Borrower. Pandemic-related supply disruptions had contributed to soaring copper prices, including copper cathodes - the Borrower's key production input, during the second half of 2020 and continuing into 2021. The Loan will enhance the Company's financial resilience to withstand the potential negative implications of the COVID-19 pandemic through providing funding to source raw materials.
Transition Impact
ETI score: 64
- Primary TI quality - Resilient: The project will improve the Borrower's financial resilience to withstand the potential negative implications of the COVID-19 pandemic.
- Secondary TI quality - Inclusion: The project will improve engagement, recruitment and integration of disabled workers through an externally verified program.
Client Information
UNITED METALS COMPANY
United Metals Company (the "Borrower"), is an Egyptian joint stock company specialized in the production of copper rods, the main raw material used in the production of copper cables. The Borrower is 99.8% owned by El Sewedy Electric (the "Sponsor" or the "Guarantor"), a fully integrated energy solutions provider and one of the largest manufacturers of wires and cables in the Middle East and Africa. El Sewedy Electric is publicly-listed on the Egyptian Stock Exchange with a market cap of around EGP 19.09bn/USD 1.22bn as of 11 August 2021. The Borrower is former client of the Bank through a loan provided in 2017.
EBRD Finance Summary
USD 25,000,000.00
Total Project Cost
USD 25,000,000.00
Additionality
- Financial Additionality -Financing Structure: The EBRD facility will provide stable working capital funding compared to the current short-term working capital facilities available to the Borrower.
- Non-Financial Additionality: The Sponsor together with its vocational training academy (El Sewedy Technical Academy") will partner with the EBRD to launch a first of its kind awareness campaign for promoting equal opportunities aimed at empowerment of women and people with disabilities in the manufacturing industries in Egypt. EBRD will provide technical support to enhance the Group's capacities in this area, hence, opening up new employment and skills-building opportunities for people with disabilities.
Environmental and Social Summary
Categorised B (2019 ESP). United Metals Company is an existing client of the Bank and has demonstrated a robust approach to Environmental and Social (E&S) matters. The Project does not involve any capital expenditure (CapEx) and the limited E&S risks and impacts are associated with routine operations. The current E&S Action Plan - ESAP (under EBRD's 2014 E&S Policy), which sought to reduce dust emissions from the furnace and improve occupational health and safety, has been fully implemented.
E&S due diligence for the United Metals Company Project was conducted by ESD and included a review of EBRD's previous appraisal, E&S reporting by the Company and follow up questions to consider EBRD's 2019 E&S Policy including on supply chain risk management and GBVH. United Metals Company maintains certified management systems to manage environmental and health and safety risks. This includes a supply chain management system, which sets out procedures for considering and avoiding E&S risks associated with its suppliers. Labor provisions are aligned with PR2 and covered within various HR policies, procedures and an employee handbook, including provisions on harassment in the work place, equal opportunities and non-discrimination, employee code of conduct, employee training and a grievance mechanism. No retrenchment of employees was required due to COVID-19. The Company operates a gas-fired furnace to melt copper cathodes for the production of copper rods. The emissions from this furnace are now in line with the EU standards. The Company has further implemented various energy efficiency investments to reduce energy demand. GHG emissions from the facility do not exceed 25,000 tons CO2/year. The Company's facility is located in an industrial area of Cairo. No land acquisition is required for the Project and the Company's operations are distant to any communities or sensitive receptors. Occupational health and safety provisions and performance are in line with EBRD's requirements. Such provisions extend to the transport of its products by road. United Metals Company has put in place appropriate controls to manage risks associated with COVID-19. The project is not associated with any impacts to biodiversity or cultural heritage. The Company has in place a stakeholder engagement plan and associated grievance mechanism.
A limited ESAP has been developed and agreed with the Company. Key actions include maintaining the supply chain management system in line with EBRD's requirements and ensuring that the external grievance mechanism is maintained. Reporting by the Company to EBRD on E&S matters will continue on an annual basis.
Technical Cooperation and Grant Financing
Associated Grants, TC and non-TC: Gender and Inclusion TC Framework (TCRS 12804)
TC will enhance the capacities of the Sponsor and El Sewedy Technical Academy (STA) in delivering disability-inclusive human resources policies and practices (affecting workers' recruitment, on boarding and integration) and training programs.
Company Contact Information
Sami Nabil
Sami.Nabil@ElSewedy.com
PSD last updated
18 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
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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.
