The proposed project will facilitate further growth and expansion of one of the leading manufacturers of pharmaceutical products in Ukraine, Farmak. It envisages upgrades of the existing and creation of new manufacturing facilities in conformity with GMP standards.
The participation of the Bank in this Project is consistent with the increased financial support of dynamic local companies, improving standards of financial management and corporate governance.
This is the first Bank’s project in the Ukraine’s pharmaceutical industry. It will promote introduction of new efficient technologies including an innovative bio-technology as well as GMP standards, staff training and export in the industry.
The proposed transaction may lead to greater competition in the pharmaceutical sector by strengthening the role of a local, low cost manufacturer in the production of new higher quality products, some of which are currently imported.
Open JSC Farmak is one of the leading manufacturers of pharmaceutical products in Ukraine.
A corporate loan of EUR 32 million, part of which will be syndicated to commercial banks.
EUR 86 million.
The project was screened B/1. Environmental issues associated with the proposed modernisation programme were identified, assessed and mitigated. Independent environmental due diligence of Farmak’s existing facilities and operations and of the proposed investment programme confirmed that the Company is currently in compliance with all relevant Ukrainian legislation and has successfully implemented the international environmental management system, ISO 14001.
Environmental due diligence
Independent environmental due diligence of Farmak’s existing facilities and operations and of the proposed investment programme confirmed that the Company is currently in compliance with all relevant Ukrainian legislation and has successfully implemented the international environmental management system, ISO 14001.
Summary of environmental action plan
The Company is was required to implement a comprehensive and fully costed environmental programme for 2006 incorporating energy efficiency, water reduction, transportation, storage and handling of hazardous materials, air emissions, treatment of wastes and wastewater. An Environmental Action Plan (EAP) has also been developed as part of the environmental due diligence principally relating to potential soil and groundwater. Implementation of the EAP was included in the Loan Agreement. All the requirements of the EAP have been completed by September 2011, which was confirmed during a monitoring visit by Bank environmental staff.
Disclosure and consultation issues
In the context of the EBRD’s participation in the project, the Company has released locally a summary of relevant environmental issues associated with the project and summarise mitigation measures, action plans and other initiatives agreed, as in accordance with the provisions of the EBRD’s Environmental Policy. The summary in English has also been posted on the EBRD’s website at www.ebrd.com.
Project monitoring and reporting
The Company will notify the Bank on material issues relating to accidents or incidents with environmental, health or safety implications. The Company will arrange for and cover the costs of environmental monitoring visits by Bank staff or appointed representatives to be carried out when deemed necessary. Original due diligence recommended site investigations for land contamination risks for both production sites of the Kiev based plant. A 2011 monitoring visit confirmed that such was carried out only for one site, identifying some soil contamination that had been cleaned-up subsequently.
Olexiy Ivanchenko, Financial Director
Tel: 380 44 496 87 69
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