Translated version of this PSD: Romanian
A co-financing in form of a senior loan of up to EUR 36.7 million to CTPark Bucharest West I SRL (the "Company"), to support the Company's expansion within the existing logistic park (the "Bucharest West Park") located in the outskirts of Bucharest, 23 km west of the city centre.
The proceeds of the EBRD loan will be used to finance the development of two new warehouses in Bucharest West Park.
The main transition impact of this operation is expected to come from setting standards of corporate governance and business conduct. The two newly developed warehouses will incorporate best available technologies, potentially to be reflected in certification under an internationally recognised scheme such as LEED or BREEAM. Since building certification of logistics assets is not yet very common in Romania, this project is expected to demonstrate advanced building sustainability standards.
CTPARK BUCHAREST WEST I SRL
The company is part of CTP Group and owns and operates Bucharest West Park of approximately 600,000 sqm gross leasable area (GLA). CTP Group owns the largest portfolio of premium business parks in Central Europe with over 3 million sqm GLA of A-class properties in over 60 strategic locations.
EBRD Finance Summary
EUR 36.7 million
Total Project Cost
EUR 111.8 million
Total project cost includes the value of existing buildings within Bucharest West Park and the development cost of the new warehouses.
Environmental and Social Summary
The project was categorised B in accordance with the 2014 EBRD Environmental & Social Policy as the environmental and social impacts associated with the Project can be readily identified and addressed by adequate mitigation measures. Environmental and Social Due Diligence (ESDD) undertaken by ESD staff focused on examining the client's environmental and social risk management capacities, legal compliance, impacts and mitigation measures related to the refurbishment work, and the potential impacts to existing tenants.
The two warehouse buildings currently under construction are located next to each other in an existing logistic park on the outskirts of Bucharest. There are no residential housing, schools and hospitals in close proximity as the buildings are in an industrial zone. They are expected to become operational in 2017. The Sponsor has the largest portfolio of premium business parks in Central Europe and is accredited with ISO14001 and ISO 50001 at the Group level. The Sponsor both at the group and project levels has had no legal breach in relation to environment, labour and health and safety standards for the past two years. Their strategy is to own the portfolio for a longer term, and therefore energy and resource savings are sought to reduce the maintenance costs. The company has an established design template for the warehouses in line with good international practice, and a traffic study has also been carried out for each development.
The land plots are greenfield, and a geotechnical survey has been undertaken for each plot. The survey results showed that the sites are suitable for the warehouse development. An environmental permit for the warehouse construction, including public disclosure of the project by the municipality, has been obtained prior to a construction permit being issued in accordance with the Romanian law. The sponsor asserted that there are no known public concerns about the project. The project is not associated with resettlement and economic displacement. Given the location, there are no issues associated with biodiversity and cultural heritage impacts. Water is supplied from wells drilled in the logistic park with an official permit. Wastewater is pre-treated at the site and discharged to the municipal sewage network with a permit. Construction waste and solid waste generated by the project are handled and disposed in accordance with the national law.
Regarding the life and fire safety, the project will be equipped with automated fire alarm, sprinkler and hydrogen fire fighting systems. Prior to the commencement of the warehouses, the local fire authority will inspect the facilities to confirm that the fire prevention and fire fighting systems are in accordance with the approved design. The Sponsor regularly monitors the use of the warehouses to ensure the safety standards are maintained on site.
With regard to construction worker labour and Occupational and Health issues, the following were identified in the ESDD. One warehouse under EBRD's financing has been already roofed and the other warehouse's structure has been built. The structure of the warehouses are relatively simple compared with other types of buildings. There are approximately 80 workers at the site (February 2017). During the remaining work, a maximum of approximately 200 workers will be at the site. All construction workers' employment documentation needs to be in place and it is checked as the first requirement by the labour inspector when the inspection takes place. The workers commute from the surrounding areas, and there is no on-site accommodation. The general contractor is part of the group and hires various specialised subcontractors. The subcontractors are obliged to comply with Romanian environmental, labour, health and safety law stipulated by the contracts exchanged with the general contractor. There have been no material accidents at the project site from the start of the earth works. Any incident involving requests for ambulance services at the project site is required to be reported to the authority and to be followed up by the Client. When the site becomes operational, there will be a need for a grievance mechanism that can be used by workers and tenants of the buildings which has been included in the ESAP.
While the remaining construction, finishing and commissioning work are relatively less complex, there is a scope for improvement in terms of construction OHS practice such as stringent enforcement of wearing protective helmets and fencing the work area. An ESAP is currently being developed to address construction workers and public grievance mechanism, OHS risks and mitigation measures during the construction and operational stage. The Bank is also in the discussion with the sponsor about the possibility of energy efficiency accreditation. If it is agreed by the sponsor by time of the Board discussion, it will be incorporated into the ESAP. The Sponsor is required to ensure that the project complies with EBRD's PRs as well as submit an annual environmental and social report to the Bank.
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