KORADO

Location:

Czech Republic

Project number:

3797

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

15 Jul 1997

Status:

Disbursing

PSD disclosed:

23 Jun 1997

 

Project Description

Equity investment to construct and operate a new radiator plant for Korado a.s, a central heating unit manufacturer based in Ceska Trebova, a city in north-eastern Bohemia.

Project objectives: By raising Korado's manufacturing capacity, the project will enable the company to meet high product demand and increase its share in existing markets and throughout Europe. Margins are expected to expand due to economies of scale.

Transition Impact

The increased production of radiators to meet the high demand will ensure that competition is maintained in this market segment. The project will allow for the transformation of a small, closely held Czech limited liability company into a medium-size company, which may be able to go public in future. It will also demonstrate to other Czech companies the advantages of expansion via equity investment.

The Client

Korado a.s. is a private Czech manufacturer of central heating units. It was established in 1991 as a limited liability company, and transformed into a joint-stock company in 1996.

EBRD Finance

The EBRD will contribute CZK 1.1 billion (ECU 33 million) in equity financing. Ceska Sporitelna, a leading Czech bank, will provide CZK 2.2 billion in the form of debt financing.

Project Cost

CZK 4.3 billion (ECU 127.3 million), including working capital requirements.

Environmental Impact

Korado is one of the largest radiator manufacturers in central Europe. The company, which employs almost 500 people, has recently initiated the construction of a new plant for the production of radiators, which would be partially financed by the EBRD's investment. The project was screened 'B/1', requiring an environmental analysis of the proposed plant and an environmental audit of the existing production facilities. An EIA was prepared in accordance with Czech law. A member of the Environmental Appraisal Unit visited the site in February 1997.

Environmental standards

The company will meet Czech Republic and EU standards. Equipment is to be supplied from EU countries, and will be built to EU emission standards for volatile organic compounds. The company does not have a history of any fines, penalties or enforcement actions. The District Department of Environment at the District Authorities in Ústí nad Orlicí has approved the new plant, subject to the conditions which have been incorporated into the Environmental Action Plan (EAP).

Public consultation

The EIA was presented to the relevant authorities and to the local community. Concerns raised focused on 1) odour from welding fumes; 2) noise from presses, and 3) increase of water consumption from public water supply. Public notification of the modernisation programme and a description of the community interaction programme are included in the Environmental Action Plan.

Odour

Concerns were raised by the public regarding odour from welding fumes at the old plant. Since the new plant will produce emissions approximately four times the volume of the old plant, a filtration facility will separate oil, particles, textiles and organics from the emissions. Efficiency rates of the filters range from 70 per cent to 99 per cent. The Bank will continue to monitor this issue.

Traffic congestion and noise

The main gate from the old plant led onto a residential street, which created traffic congestion and noise, and was a source of concern to the local residents. Public meetings were held regarding this issue, and the main gate has been moved to the side of the plant remote from the residential area. The nearby railway will be used as much as possible for transportation of the construction material and product. Noise at the fenceline was a concern of local residents. The presses in the new plant will be moved to the side of the plant which is furthest from the residential area. They will be seated on floating pile foundations and insulated for noise. A noise survey will be required prior to start-up of operations.

Water use

Public concern was raised regarding increased use of municipal water. The new plant will meet the increased demand for water by an on-site well. The new plant will have closed water-cycles, conserving a maximum amount of water.

Contamination and remediation

Part of the construction site was formerly used as a landfill. The old landfill was removed, in accordance with Czech law, and the company is required to revegetate the area with trees or bushes. This is included in their Environmental Action Plan and budget.

Monitoring

The Bank will receive an annual environmental report on the implementation of the Environmental Action Plan, and on the environmental and worker safety status of the facility. These issues will be reported to the company's Board of Directors on a routine basis. In addition, the Bank will be notified in the event of an accident or incident. An independent audit will be required five years following completion.

Technical Cooperation

None

Company Contact

 

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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 how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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