The EBRD is considering providing a senior corporate loan to Pinskdrev, the largest private sector wood processing and furniture group in Belarus.
EBRD financing will be used to implement the investment programme of Pinskdrev to upgrade its wood processing and furniture manufacturing facilities, including investments in energy efficiency enhancements and environmental improvements.
The transition impact potential of the project stems from the demonstration effect. The proposed project would be the Bank’s first to the wood processing sector and only the second direct loan to a private industrial company in Belarus.
The successful restructuring of Pinskdrev would provide a replicable platform for the restructuring of other companies in the state dominated sector and have a strong demonstration effect in how to manage a modern industrial plant. The Bank’s financing will be conditional upon acceptance by Pinskdrev of standards for improved corporate governance, including preparation and audit of IFRS accounts.
Pinskdrev is the largest private sector wood processing and furniture group in Belarus, comprising more than 30 business units. The group is vertically integrated, engaged in the whole process chain, including wood harvesting, saw milling, particle board and plywood production and furniture-making.
A senior corporate loan of up to USD 15 million.
USD 20 million, including USD 15 million from the EBRD and USD 5 million of internally generated funds by Pinskdrev.
The project was classified as B/1. Independent Environmental and Social Audit and Analysis were undertaken in June 2008. The investigations showed that environmental and social impacts from the wood-processing and furniture-making operation of the facilities are limited mainly to air and wastewater emissions and occupational health & safety (OHS) issues. The current operations are in compliance with national standards and the planned investment programme is or will be structured to meet national and EU environmental, health and safety standards based on the use of best available techniques.
An Environmental and Social Action Plan (ESAP) has been developed and agreed with the Company. It commits the Company to implement general environmental, health and safety improvements and address contingent liability issues; to implement an environmental management system compliant with ISO14001 and occupational health and safety management system compliant with OHSAS18001; to develop and implement sustainable forest management and wood procurement management practices to ensure the wood supplied for their operations is of sustainable and legal origin; and to develop all new installations, extensions and infrastructure to meet both Belarusian law, EU environmental standards and IFC EHS Guidelines and to periodically inform the local public about environment, health and safety performance and initiatives at Pinskdrev.
The Company will be required to provide the Bank with an annual environmental and social report, which will include progress made with the ESAP, and notification on any material accidents or incidents. The Bank will monitor the project through site visits and independent environmental audits, when deemed necessary.
Mr Loran Arinich, Director General
I. Chuklaya Street 1, Pinsk 225710 Belarus
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