Provision of up to EUR 42 million senior secured loan to LLC Volynholding, a subsidiary of Nestle S.A., for financing investments to develop a new production facility in Ukraine.
The Project will support development of a new production site in the Western part of Ukraine to create a food production hub in the region.
ETI score: 70
The Project is under the Resilience and Livelihoods Framework and follows the Transition Impact rationale of the framework, stemming from Resilient and Inclusive qualities.
Under the Resilient quality, the Project will support the development of a new production facility in the Western part of Ukraine, and keep economic activities in the local food production sector. As for the Inclusive quality, the Project aims to preserve the livelihoods of people directly affected by the war.
Volynholding LLC is a limited liability company incorporated in Ukraine and a fully owned subsidiary of Nestle S.A. ("Nestle", or the "Group"). Nestle is a multinational food and beverages company, headquartered in Vevey (Switzerland).
EBRD Finance Summary
Total Project Cost
A result of the war on Ukraine, the market for liquidity and long-term financing in Ukraine is almost closed, with both local and international financial institutions tightening their risk appetite. The Project loan offers financing that is not available in the market from commercial sources on reasonable terms and conditions that are necessary to finance LLC Volynholding's investment plan.
Environmental and Social Summary
The proposed Project has been categorised B in accordance with the 2019 EBRD Environmental and Social (E&S) Policy. The new site will start operations upon completion, which is expected early next year (2024). Existing management systems will be extended to new manufacturing facility, including certification to ISO 9001, ISO 14001, ISO 45001, FSSC 22000, with the aim to have these systems in place by Q2 2024. Nestle has in place a broad range of approaches, policies and procedures covering the range of Performance Requirements (PRs) of the Bank covering topics including climate action, waste reduction, protecting nature, water stewardship, human rights, sustainable sourcing, taking care of people and communities and ethical and responsible business practices. Within each of these areas, the Group has set global and local targets and defined KPIs to measures progress, as well as all required internal and external reporting structures. Nestle has confirmed that its supply chain processes have been, and will be, applied in this facility including risk mapping of supply chains. Given the above, applied at the local, regional and global levels, it is judged that the Group has sufficient capacity and commitments in place to meet the Bank's PRs. No additional actions will therefore be required of the Group. The Group will be required to provide annual reporting on the key E&S topics relevant to the project, including the roll-out of the various approaches and management systems for the Volyn facility.
Technical Cooperation and Grant Financing
Company Contact Information
+38 098 485 11 11
Verkhniy Val Street 72-A, Kyiv 04070 Ukraine
PSD last updated
01 Sep 2023
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