MK Group

Location:

Serbia

Project number:

42544

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

28 Jun 2011

Status:

Completed

PSD disclosed:

27 May 2011

Project Description

The EBRD is considering providing a loan to MK Group and Sunoko. The funding, if approved by the EBRD’s Board of Directors, will be used for:

(i) balance sheet restructuring providing a more stable platform for the growth of its operations,
(ii) working capital financing for primary agriculture and
(iii) energy efficiency investments in Sunoko’s sugar operations to achieve better operational productivity.

Transition Impact

The Transition Impact potential of the proposed project will derive from:

1) Backward linkages and transfer of know-how to farmers MK Group and Sunoko are cooperating with.
2) Setting standards in energy efficiency in the sugar processing sector, and
3) Corporate governance improvements through increasing the financial transparency of the Group.

The Client

MK Group comprises 35 affiliated companies in Serbia and is one of the leading Serbian producers and traders of agricultural commodities. The Company is active in primary agricultural production, soft commodity trading and owns and manages sizeable grain storage capacities.

Sunoko is the leading Serbian sugar producer with subsidiaries involved in sugar refining and trade. Sunoko operates 4 sugar refineries in Serbian region of Vojvodina.

EBRD Finance

Total provided financing will be in the amount of up to €80 million. Out of that amount, EBRD will finance the project up to €40 million while the remaining amount will be syndicated to international commercial banks.

Project Cost

€80 million.

Environmental Impact

The Project was categorised B according to the EBRD’s Environmental and Social Policy 2008. The potential adverse future environmental and social impacts associated with the Project are site-specific and readily addressed through mitigation measures.

Due diligence is still ongoing, following completion an Environmental and Social Action Plan (ESAP) will be developed and agreed with the Company prior to Board submission to ensure the Company's compliance with the Bank’s Performance Requirements.

The Bank will monitor the Company's environmental and social performance for the lifetime of the project through annual environmental and social reporting and via periodic site visits. The Company will be required to immediately notify the Bank of any incidents or accidents likely to have an effect on the environment or worker and public safety.

Technical Cooperation

None.

Company Contact

Mr. Vladimir Gavric
E-mail: vladimir.gavric@mkgroup.rs

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

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.