A proposed loan of up to €85 million to a joint venture company established to develop a major petrochemical complex located at Plock, Central Poland. The principal investments comprise a new polypropylene plant and a new polyethylene plant. The project will primarily supply the rapidly growing market for plastics in Poland and Central Europe. The principal investments comprise a new polypropylene (PP) plant and a new polyethylene (PE) plant. The new plants will be located at Plock, adjacent to PKN Orlen’s refinery complex. PP and PE are commodity plastics with extensive uses, particularly in packaging and containers.
The project is expected to have a strong demonstration effect on the Polish petrochemical industry. In particular, it is expected to show the advantages of promoting sector modernisation through attracting foreign direct investment and state-of-the-art technologies. This is especially important at the moment, given that there has been little modernisation in the Polish chemical sector to date due to a slow pace of privatisation. Specifically, the involvement of a major Western strategic investor and world leader in polyolefins, should contribute towards the introduction of best business practice through the provision of technical and marketing know-how. Moreover, as the product is to be exported to other countries of Eastern and Central Europe as well as a number of Western European countries, it would have positive impact on the Poland’s foreign trade balance.
The client is a joint venture chemical company, owned 50/50 by PKN Orlen, Poland’s largest petroleum refiner and retailer, and Basell Europe Holdings B.V., an affiliate of Basell N.V., a leading petrochemical producer, based in the Netherlands.
Up to a proposed €85 million senior loan. The Bank’s loan would be part of a €320 million long-term loan facility, which is to be syndicated between EBRD and commercial banks.
The total project costs are estimated at some €432 million.
The proposed project was subject to an Initial Environmental Examination (IEE), which concluded that it was unlikely to be associated with significant environmental issues. The project does not involve a major conversion of the existing petrochemicals facilities nor does it pose any serious accident or health risk. The proposed facilities are located in the industrial zone of the city of Plock which has been earmarked for industrial development since 1975. There are no inhabited areas in the immediate vicinity of the proposed facilities. There are no environmentally valuable or sensitive areas identified within the area of potential impact from the facilities. Environmental impacts associated with the development could be readily identified, assessed and mitigated. For the above mentioned reasons the project was screened as B/1, requiring an environmental analysis of the proposed development and an environmental audit of the existing facilities which will be utilised by the new project or shared with main facilities. The analysis was undertaken by local environmental consultants according to the terms of reference acceptable to the Bank and agreed by the relevant environmental regulatory authorities. The analysis showed that the project does not involve any significant environmental impacts. The facilities will utilise state-of the art technology and have been designed in line with the European Union BAT principles. They will meet Polish and EU environmental standards.
Currently the following mitigation measures are anticipated:
The effluents will be reduced through the implementation of a closed water loop. The remaining effluents will be directed to the main wastewater treatment plant, which has adequate treatment capacity.
Air emissions will be minimised through the advanced technology and further controlled through installation of filters and special equipment such as double insulated valves and oil ring pumps. The total emissions from the proposed facility will be insignificant in relation to emissions from the main plant which complies with relevant environmental standards.
Noise abatement measures will be taken into consideration in the plant design, aiming at keeping the noise below Polish and EU limits.
Most of the wastes will be recycled or utilised in other processes at the main plant. Disposable wastes will be either incinerated or stored in a landfill. All facilities to be used will meet the Polish requirements and will be in line with the relevant EU Directives.
The facilities will have very low specific energy use.
The implementation of environmental, health and safety measures will be monitored by the Bank during the implementation and operation of the project.
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