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.
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.
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.
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
Total Project Cost
- 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
PSD last updated
18 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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