Project Description
The Project consists of capex financing split between: production facilities, equipment focused on improving productivity and energy and resource efficiency, and a solar power installation for own use.
Project Objectives
The Project will result in improved energy efficiency due to improved production process (improved scrap processing and input, reduced heat dissipation, improved processing of semi-finished goods etc).
Transition Impact
ETI score: 62
GET Direct Track
Around 74% of EBRD use of proceeds will support green economy transition by financing i) equipment focused on improved energy and resource efficiency at the Company's production plant and ii) solar PV installation.
Client Information
METALFER STEEL MILL DOO
Metalfer Steel Mill d.o.o. is a limited liability company incorporated in Serbia, active in production of concrete reinforcement steel. The Company operates a rolling mill and a foundry, producing steel billets, rebar (short for 'reinforcing bar') and wire rod, employing around 600 people.
EBRD Finance Summary
EUR 21,400,000.00
A senior secured long-term loan (the "Loan") of up to EUR 21.4m to finance the Project.
Total Project Cost
EUR 25,400,000.00
Additionality
Standard-setting: helping projects and clients achieve higher standards
Financing Structure: EBRD is providing a structure suited to match the financing needs of the Company.
Environmental and Social Summary
Category B (2019 ESP). The E&S risks and impacts associated with capex into steel plant and installation rooftop solar power plant (up to 4 MW) are site-specific, readily identified and will be managed by the existing E&S management systems. The Environmental and social due diligence (ESDD) was undertaken in-house by ESD and included the review of environmental and social (E&S) Questionnaires; follow up interviews with client's EHS representatives; site visits to the existing steel production facilities; and well as review of supporting EHS documentation.
The steel plant as well as planned solar investment are located away from ecologically sensitive areas and overall in an industrial setting. The Company has expanded from a small operations in the past few years and therefore not all of the infrastructure has yet been fully developed, for instance appropriate scrap storage or drainage systems. However, the site is well managed and the ESDD confirmed that the Company has the institutional capacity to implement the Bank's PRs. The company has been certified with internationally recognised ISO standards for quality management (9001), environmental management (14001) and occupational health and safety (45001) and has EHS management systems, policies, and operational procedures in place, and is additionally using external resources wherever needed. The client complies with local permitting requirements and has in place: an integrated pollution prevention and control permit which is covering melt shop and old rolling mill and is in the process of obtaining the integrated permit for the new rolling mill facilities. The main emissions from the Electric Arc Furnace (EAF) are in line with National legislation, however additional investments will be needed in the future to meet EU BAT requirements.
The company complies with national requirements for labour and working conditions, which are in line with core ILO conventions and forced labour and child labour are prohibited by local legislation. The Company has Code of Conduct in place, the Rulebook on Internal Organisation and Systemisation of Workplaces, and maintains an anti-harassment policy prohibiting all forms of harassment, including sexual harassment.
The project does not require any land acquisition and all works envisaged by the project will be implemented within existing facilities and/or industrial yard, while solar power plant will be installed on the roofs of existing facilities.
The OHS related issues are covered as part of the existing comprehensive OHS management system and decent OHS practices have been noted during E&S site visit, with some areas for improvements identified as part of the site visit as stipulated by ESAP. The company is undertaking regular internal and external monitoring of H&S risks and trainings, internal and external testing of quality and safety of materials, periodical internal and external examinations of H&S equipment; and has reported adequate response to COVID-19.
Based on the ESDD an ESAP has been developed and includes measure for the client to (i) address to the local authorities to check whether any update of the permit is needed for the project, (ii) update of the General Procurement Procedure to consider supply chain risks, including and explicitly those related to the supplier of solar panels, (iii) and undertake organisational capacity increase for communications and stakeholder engagement. Since the project will include construction of up to 4 MW rooftop solar power plant, the ESAP stipulates that the client should inform the contractor or supplier of solar components of the requirement to select products from the Green Technology Selector (GTS), which is in line with requirements of the PR2 and EBRD's Management approach for distributed solar below 5 MW. The ESAP includes a BAT audit in 2023 and further investments to address fugitive emission in the short to medium terms as well as report in line with the EU Corporate Sustainability Reporting Directive (CSRD) by 2025. This includes climate related information (i.e. TCFD) and Taxonomy. The ESAP requires a formal worker grievance mechanism compliant with PR2 to be provided to all workers and contractors, and development of supply chain management system as part of wider ESMS to cover for social risks and impacts associated with supply chains.
Technical Cooperation and Grant Financing
The EBRD Shareholder Special Fund (SSF) was used for external legal due diligence.
Company Contact Information
Jelena Zakonovic
+381 22 621636
PSD last updated
17 Jun 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.
