RLF - AMKR Working Capital

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

Provision of a senior loan (the "Loan") of up to USD 100 million to Ukraine based ArcelorMittal Kryviy Rih JSC (the "Company"), a joint stock company majority owned by ArcelorMittal Group ("AMG").

Project ID 54193

Status Disbursing

Location

Ukraine

Business Sector

Manufacturing and Services

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Sergey Plitchko
amkr@arcelormittal.com
+38 (056) 499-3233
+38 (056) 499-3233
www.arcelormittal.com
Kryvorizhstali,1 50006 Kryvyi Rih Ukraine

Project ID 54193

Status Disbursing

Location

Ukraine

Business Sector

Manufacturing and Services

Notice Type

Private

Approval Date

14 Dec 2022

Disclosure date

15 Dec 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.

RLF - AMKR Working Capital (Ukrainian) (PDF, 0.47MB)

Project description

Provision of a senior loan (the "Loan") of up to USD 100 million to Ukraine based ArcelorMittal Kryviy Rih JSC (the "Company"), a joint stock company majority owned by ArcelorMittal Group ("AMG").

Project objectives

The Loan will be used for financing of the working capital needs of the Company to ensure the continuity of operations in Ukraine.

Transition impact

ETI Score:70

transition impact of the Project will derive from the Resilient Transition quality through the support of the economic activities at the Company at times when the operations are affected by the war on Ukraine. The transition impact of the Project will also derive from the Inclusive Transition quality by preserving AMKR's sizeable workforce as part of its human capital emergency response.

EBRD Finance Summary

USD 100,000,000.00

Total project cost

USD 100,000,000.00

Additionality

The EBRD financing is provided under extraordinary circumstances stemming from the war on Ukraine, offering a unique set of terms, attributes and conditionalities.

Environmental & Social Summary

Categorised B (2019 ESP). The Bank provided financing to the Company in 2017 and developed a comprehensive Environmental and Social Action Plan (ESAP) to allow the Company to attain significant environmental and social improvements and attain EU environmental standards in the long term as well as Arcelor Mittal's Group (AM) decarbonisation commitments. The Bank has been monitoring the implementation of the ESAP and has undertaken monitoring visits to the Company in recent years. Overall the Company has been on track with implementation and has provided reporting in line with requirements. The provision of working capital under the Ukraine resilience framework will allow, among other things, for the continuation of the investment plans and implementation of the existing ESAP, which in turn will allow for significant environmental and community health & safety improvements at the site; however, as noted in 2017 this investment plan will not allow for the Company to attain EU environmental standards and full BAT compliance within the short to medium term across the whole plant due to the magnitude of environmental legacy issues. A derogation from the Bank's Environmental and Social Policy is in place with regards these works and this will require to continue. No new derogation is required under the new Project and related use of proceeds. The continuation of the investment plans and implementation of corporate climate polices allows the Project to be Paris Aligned and attain in the long term EU compliance.

As part of this Project a fast-track due diligence review has been undertaken using questionnaires, annual reports and discussion with the Company, which has allowed for meaningful review of the Company performance and ESAP implementation. This has confirmed that the continuation of the planned investment programme will allow for delivery on the environmental and social improvements at the plant; advancing the long term road map for attaining EU compliance; and implementation of the AM corporate climate polices as mentioned above.

A key aspect of the ongoing investment programme is to upgrade the sinter plant and construct new facilities with the closure of the old metallurgical sinter line. This included a commitment for the full closure of a number of old sinter lines and construction of new installations. The old metallurgical sinter line will be fully closed, and further air abatement investments on the steel shop with the development of secondary air abatement to remove fugitive emissions from the converters will be implemented. This is required under EU BAT requirements and will result in reduction of fugitive emissions and further improvement of air quality. The modernization has significant carbon emission reductions and will bring the plant towards international benchmarks for carbon emissions. Avoided carbon emissions were estimated at 800,000 tons CO2 eq/y. This investment process is ongoing, with work on sinter lines in place as well as air abatement facilities. However, some of the investments planned for 2022-3 have been delayed due to the ongoing war and proximity of conflict.

The Company decarbonisation plans are consistent with AM's corporate commitments to achieving net-zero by 2050, and having a group target of 25% by 2030. AM reports in line with TCFD at a Group level and in future will report under the EU reporting frameworks.

It should be noted that AMKR over the years has made significant progress in addressing EHS management issues and improving stakeholder engagement, which has been reviewed as part of the Bank's due diligence. Based on the in-house ESDD, the ESAP will be updated prior to Board consideration to take account of current timeline as well as EU legislation such as the EU Corporate Sustainability Reporting Directive (CSRD) and EU Taxonomy. The Company will be required to undertake an audit within 12 months of the lifting of martial law and ESD staff will assist in this process. Based on the independent sustainability audit the ESAP will be updated. The Bank will continue to monitor the Project.

Technical Cooperation and Grant Financing

The Project benefits from TC for the legal due diligence.

Company Contact Information

Sergey Plitchko
amkr@arcelormittal.com
+38 (056) 499-3233
+38 (056) 499-3233
www.arcelormittal.com
Kryvorizhstali,1 50006 Kryvyi Rih Ukraine

PSD last updated

15 Dec 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 the 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 its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) 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 also requires its clients to disclose information, as appropriate, about the risks and impacts of 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 of the Bank's activities 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 EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either 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. OCCO will follow-up all matters reported. It will review all matters reported. 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, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. 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 (for example, 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 the 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 and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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RLF - AMKR Working Capital

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Technical Cooperation and Grant Financing

Company Contact Information

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)