Loan to a wood processing company in the Slovak Republic for modernisation and extension of its core production facility and improvements to the energy systems.
The project aims to upgrade and expand Bucina Zvolen's core production facility, which will enable the company to improve the product quality, enhance its profitability, meet growing product demand and increase its share in existing markets throughout Europe. Reconstruction and modernisation of the company's energy system will eliminate inefficiency and significantly contribute to environmental improvements.
The project demonstrates substantial economic benefits including, among other things, improvements in waste product usage/recycling. This will result in further cost reduction and profitability increase. Energy efficiency investments will focus on reducing energy distribution losses and utilising co-generation opportunities. The impact on the transition arises from the company's on-going restructuring process, focusing core business operations in a separately established subsidiary.
Bucina Zvolen a.s. is a private Slovak mechanical wood processing company. It was established as a subsidiary of Bucina a.s., an industry leader with a history of more than 50 years.
The EBRD will provide a loan of DM 28.54 million (ECU 15.16 million).
DM 28.54 million (ECU 15.16 million).
The project was screened as B/1, requiring an environmental audit of the existing facilities and the project site and an analysis of the investment proposed.
Due diligence was conducted in accordance with terms of reference prepared by the Bank. In general, Bucina Zvolen was found to be in compliance with the prevailing environmental requirements in the Slovak Republic, which have been undergoing harmonisation with those of the European Union. In addition, the company is ISO certified for quality (according to the ISO 9,000 series), and is currently planning certification for environmental management (under the ISO 14,000 series).
In order to bring the facilities up to international standards and to address environmental issues identified during the due diligence process, an Environmental Action Plan (EAP) has been developed and agreed between company management, the environmental authorities and the Bank. Key measures in the EAP include additional investigation and mitigation of residual contamination in the former areas of wood treatment and waste management units, based on extensive existing information, in agreement with the environmental authorities and the Bank. Other measures include a series of gradual improvements to energy efficiency, air emission and waste-water treatment. These will be addressed in part by the investment project under preparation.
Together with the main components of the investment project, the EAP would bring operations in line with European Union standards for the environment. Implementation by the company of the EAP will form part of the legal agreement with the Bank and will ensure compliance with both Slovak and European Union standards. Furthermore, the company will be required to report to the Bank periodically on the environment and health and safety and on the implementation of the EAP.
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