Sofia Med Sustainable Expansion

Location:

Bulgaria

Project number:

53076

Business sector:

Non-ferrous Fabricated Metal Product Manufacturing

Notice type:

Private

Environmental category:

B

Approval date:

08 Dec 2021

Status:

Passed Final Review, Pending Approval

PSD disclosed:

06 Oct 2021

Project Description

Up to EUR 20 million senior secured loan to Sofia Med AD 

Project Objectives

The proceeds of the loan will be used to finance the Company's 2020-2022 Capex programme aiming to expand production capacity in respect of copper and copper alloy strips, mainly to respond to increasing demand for copper in 'green' applications.

Transition Impact

ETI score: 60

Green - the project entails capacity increase for manufacturing of copper and copper alloy strips, to be used for e-mobility and renewable energy applications. The project qualifies for EBRD Green Economy Transition ("GET") recognition under the "Metal production for climate action" category of the new joint Multilateral Development Banks' ("MDB") methodology.  

Client Information

SOFIA MED AD

Sofia Med AD ("Borrower" or the "Company"), a joint stock company incorporated in Bulgaria, is a copper fabricator, producing mostly rolled and extruded copper and copper alloy products for a number of sectors. 

EBRD Finance Summary

EUR 20,000,000.00

Senior secured loan of up to 7 years tenor

Total Project Cost

EUR 27,000,000.00

Additionality

The additionality of the EBRD financing includes risk mitigation and standard-setting: helping projects and clients mitigate climate governance risks and take climate action, such as to improve their internal corporate governance for managing climate risks.

Environmental and Social Summary

Categorised B (2019 ESP). The Company is an existing client of the Bank and has demonstrated a robust approach to Environmental and Social ("E&S") matters. The Project involves significant CapEx investment, which includes adding two new bell annealing furnaces increasing the annealing throughput capacity from 68 000 to 98 000 tons p.a., as well as a new cold rolling unit, increasing the capacity from 100 000 to 170 000 tons p.a.. The E&S risks and impacts are associated with construction and operation of the new project and include health & safety, air emissions, fugitive emissions, water management, energy efficiency and noise. These impacts are similar to those associated with existing operations and can be readily addressed through mitigation measures and existing E&S management provisions. The previous E&S Action Plan ("ESAP") agreed with EBRD, has been fully implemented. Nevertheless, the E&S due diligence ("ESDD") identified some areas that the Company needs to focus on and a limited ESAP has been developed and will be agreed with the Company before Board. Key action include maintaining both the supply chain management system in line with EBRD's requirements as well as the internal and external grievance mechanism and enhancing Company's policies with regards to gender-based violence and harassment ("GBVH"). Reporting by the Company to EBRD on E&S matters will continue on an annual basis.

ESDD was conducted by the EBRD Environment and Sustainability Department ("ESD") and included a review of EBRD's previous appraisal, annual 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. The Company operates certified management systems to manage environmental and health and safety risks. Labour provisions are aligned with PR2 and covered within various HR policies and procedures, 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 three production units: Foundry, Rolling and Extrusion mills that are permitted and in compliance under Annex 1 of the EU Industrial Emission Directive as well as with the BAT/BREF documents for Non-ferrous Metals Industries. The project will also be required to be fully aligned with the IED requirements and the Company needs to amend their permits for each stage of its implementation. The Company has further implemented various energy efficiency investments to reduce energy demand. The Company's facility and proposed project (within the same facility) are located in an industrial area of Sofia, distant to any communities. No land acquisition is required for the Project. The Iskar River is in proximity of the facility, however this does not pose a significant flood risk, as there have been no known flooding events registered and river flows are regulated through the Iskar Lake Dam located 50 km upstream.   

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. The 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.

Technical Cooperation and Grant Financing

As part of the engagement, EBRD will provide TC support to the Company to develop and implement a Low-Carbon Pathway ("LCP") to align their operations to the goals of the Paris Agreement on climate change.

Company Contact Information

Sergey Vlaykov
info@sofiamed.com
www.sofiamed.com
4 Dimitar Peshev str., 1528 Sofia, BULGARIA

PSD last updated

06 Oct 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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