DFF - Glass Container Company

Location:

Moldova

Project number:

48690

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

06 Dec 2016

Status:

Repaying

PSD disclosed:

05 Oct 2016

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.

Project Description

The EBRD is providing a long-term loan of up to EUR 5.3 million to Glass Container Company JSC (GCC), one of the largest glass bottle producers in Moldova. The loan will be used to finance part of the modernisation of GCC's existing factory, comprising an investment into a new melting furnace and two new production lines. 

Project Objectives

The project's objective is to improve the quality of the factory's final products, expand its product range that will facilitate export to western markets, as well as to increase its production and energy efficiency.

Transition Impact

ETI score: 80

The project's transition impact potential will derive from demonstration of successful restructuring. The company will introduce new technology and new products which will remove the existing bottlenecks in production after the rebuilding of the glass furnace and purchase of two new forming machines with higher specifications.

Client Information

GLASS CONTAINER COMPANY SA

EBRD Finance Summary

EUR 5,300,000.00

A corporate loan facility of up to EUR 5.3 million and additional EUR 2.2 million to be co-financed by the International Cooperation and Development Fund (TaiwanICDF).

Total Project Cost

EUR 14,217,897.75

The total cost of the project is EUR 13.5 million of which EUR 5 million will also be co-financed by a local commercial bank.

Environmental and Social Summary

Categorised B (ESP 2014). The environmental and social impacts associated with investments into a new furnace and equipment upgrades at an existing glass plant have been shown to be site-specific and effectively mitigated via implementation of the agreed Environmental and Social Action Plan (ESAP). Environmental and social due diligence (ESDD) was undertaken in-house and included an environmental and safety audit of the existing facilities, an assessment of the proposed furnace reconstruction project, a review of the company's environmental and social (E&S) management systems and operational practices, regulatory compliance status, and overall capacity to implement the project in line with EBRD's performance requirements. ESDD has confirmed that the company generally meets requirements of the local E&S legislation and has an E&S structure in place to deliver the project in compliance with EBRD performance requirements.

The plant is located within the industrial zone in the suburb of Chisinau, with no sensitive receptors in the vicinity. The nearest residential areas are about 1 km from the site.  GCC's full factory modernisation program, entails the rebuilding of the old melting furnace, purchase of two new production machine-lines, including the hot-end and cold-end equipment. The investments will include both the acquisition of new equipment, as well as construction works, and will be carried out using the European furnace designs, European materials and employ a European furnace constructor for a turn-key project (as a result of the internal GCC tender, furnace design and construction will be made by Techglass from Poland and for IS forming machines and other components of the production lines - Bottero from Italy) in order to ensure the quality of the works.

The major issues identified during ESDD that require mitigation measures include inconsistent environmental and safety monitoring and controls, specifically in terms of polluting substances emissions and discharges, insufficient enforcement of the safe operational practices, lack of the consistent stakeholder and grievance management. 

A number of recommendations were formulated into an Environmental and Social Action Plan (ESAP) covering a number of areas from the improvement of the current corporate E&S management system to more site-specific actions. These include, amongst others, enforcement of safe labour practices, reduction of dust and NOx emissions, water pollution prevention, energy management system implementation,  improved environmental and safety monitoring, implementation of the Stakeholder Engagement Plan and grievance mechanisms.

Technical support funds will also be provided to support the Company in the improvement of the Environmental and Safety Management Systems in line with ISO 14001 and OHSAS 18001 requirements.

The Project will be monitored by the Bank on an annual basis through the Annual Environmental and Social Reports.

Technical Cooperation and Grant Financing

It is envisaged that part of the capital expenditures will be eligible for a grant from Finance and Technology Transfer Facility for Climate Change, utilizing donor funding provided by the Global Environment Facility (GEF).

The project will benefit from the technical cooperation support under the EU DCFTA SME Direct Facility as follows:

  • Legal due diligence and technical feasibility;
  • Financial management and reporting;
  • Implementation of the Environmental Action Plan.

In addition, the project will be supported by international advisory services under the EBRD's Enterprise Growth Programme focusing on export promotion and product expansion to EU markets; development of long-term management, operations and market and strategies.

Company Contact Information

Boris Crivoi (Chief Financial Officer)
gcc@gcc.md
+ 373 22 89 58 00
+ 373 22 89 58 01
www.gcc.md
201 Uzinelor str., Chisinau city, Republic of Moldova, MD2064

Implementation summary

The Project supported an extensive modernisation program at the Company's production facility in Chisinau, Moldova, consisting of (i) the ground-up reconstruction of the glass-melting furnace, (ii) purchase of two new production machine-lines to replace the 20+ year's old existing ones, (iii) as well as acquisition of new quality control equipment.  The company increased its production capacity to more than 60 thousand tonnes of glass in 2020 and exported more than 70% of the sold production.

The delivery against the transition impact monitoring benchmarks, which contribute to the Competitive and Green transition qualities, are well on track and nearing completion. Under the Green quality, the Project has contributed to significant reduction of the Company's natural gas consumption in 2020 by around 3.7 million cubic meters, which corresponds to over 7,000 tons of CO2 savings, while under the Competitive quality it achieved a successful turnaround following relaunch of production and improved operational and financial performance.

The project also ensured adherence to strict environmental, energy-efficiency and social standards. Inter alia, Environmental and Social Action Plan (ESAP) agreed for the Project stipulates achievement of the air emission levels compatible with the WB standards and IED BAT requirements for the sector. The Client has implemented emission monitoring program that has demonstrated that such standards have been largely achieved. Other improvements achieved under ESAP implementation, included strengthening of the Environmental and Social Management systems, health and safety practices, social and labour protection.

PSD last updated

08 Dec 2021

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

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both 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. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. 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 sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. 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 (e.g. 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 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; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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